A boat loan is a loan used to purchase a new or pre-owned boat. It may be necessary to obtain a boat loan if you don’t have the cash to purchase the boat outright.
Boats vary in size, use, condition, and features, and the loans to finance them vary just as much. There are unsecured boat loans, secured boat loans, loans offered by banks and online lenders, and loans offered by marine lending specialists. There are also commercial boat loans which are ideal if you use your boat as a business such as a charter operation.
The best boat loans offer competitive rates and terms, are available for a variety of boats, and are offered by reputable banks. We reviewed more than a dozen companies that offer boat loans before deciding on our top choices. Keep reading to see which boat loan is right for you.
Best Overall : Essex Credit
Why We Chose It: Essex Credit is our choice for best overall boat loan because it offers multiple types of loans including ones for borrowers who use the boat recreationally and for those who want to live on their boat. It has a simple online application process, has been in business since 1981, and offers long terms.
Multiple types of boat loans
Long history in the marine industry
Live-aboard loans which all lenders don’t offer
You can’t finance a boat that was manufactured before 2000
Some negative customer reviews
No short-term boat loans
Essex Credit is a division of Bank of the West. Its goal is to get you approved for a boat loan as quickly and easily as possible. It offers boat loans for new and used boats (year 2000 or newer) as well as RV loans and boat refinancing options. The company has mixed customer reviews with some customers appreciating the ease of the online applications while others had a difficult time getting in touch with someone from customer service.
It specializes in long-term boat loans from four to 20 years for borrowers with good credit; typically a minimum FICO score of 700 or higher is needed. Loans have fixed rates starting at 3.99% (as of January 2021) and no prepayment penalties. However, there are loan processing fees that vary depending on the type of loan. Additional fees that you will incur when purchasing a boat include taxes, title, registration, and licensing fees. These can be rolled into the loan as long as your loan-to-value ratio (LTV) is 85% or lower.
The company performs an instant credit review when you apply for a boat loan online but funding times vary based on the type of vessel and type of loan. Essex Credit finances most types of boats except those that go over 99 mph.
Best for Bad Credit : Southeast Financial
Why We Chose It: Southeast Financial is our top choice for boat loans for borrowers with bad credit because it doesn’t have a minimum FICO score requirement and will even lend to borrowers who have filed for bankruptcy in the past.
No minimum FICO score
Lends in 48 states
No live-aboard vessel loans
Fees aren’t published
Doesn’t usually finance charter boats
Southeast Financial has been financing boats since the early 2000s, offers loans in 48 states, and focuses on providing the best rates and terms for all of its customers. It specializes in funding subprime borrowers’ loans. In addition to boat loans, it offers RV loans, boat warranties, horse trailer loans, and motorcycle loans. Customers appreciate the responsive customer service teams, marine industry knowledge, and variety of loans.
Rates typically start at 4.49% (as of January 2021) and terms go up to 15 years. Loan applications are processed within 24 hours and funding generally takes three to five business days. The company doesn’t require a minimum boat loan amount and typically will finance boats up to $4 million. It offers loans for new and used boats for recreational purposes only; it does not offer live-aboard boat loans.
Financing fees vary depending on the type of loan, type of vessel, and borrower qualifications.
Best Unsecured Loan : LightStream
Why We Chose It: We chose LightStream as our best unsecured boat loan because their loans require no collateral, they offer a Rate Beat program, and quick funding.
No collateral needed for a boat loan
Simple loan application
No loan processing fees
No terms over 7 years
Loans only go up to $100,000
Some negative customer service reviews
LightStream is an online consumer lending division of SunTrust Bank, a part of Truist Bank. The company offers boat loans, banking products and services, home improvement loans, swimming pool loans, RV loans, and motorcycle loans. The company was founded in 2014 as a small startup company and has grown into an innovative online lending platform.
LightStream believes in rewarding borrowers with good credit with a simple loan application, seamless loan process, and rapid funding. It offers same-day approvals and can even fund some loans the same day, although others will be funded in a few days. It offers new and used boat loans nationwide as well as boat refinancing. Loan amounts range from $5,000–$100,00 and terms are between two and seven years.
Rates start at 4.29% (as of January 2021) with an applied discount for autopay. There are no processing or prepayment fees and no appraisal fees. Their Rate Beat program offers a rate that is 0.10% lower than the rate offered for the same type of loan from a competitor.
Some customers love the quick application and funding process and the loan knowledge of the agents but others experienced confusion on published rates versus actual rates.
Best High-Value Boat Loan : SunTrust
Why We Chose It: Our choice for the best high-value boat loan is SunTrust because it offers loans up to $4 million with no points, service charges, or processing fees. It also has a team of dedicated marine loan specialists and is a reputable company that has been in business since 1891.
No loan processing fees
Offers loans for expensive boats
Team of knowledgeable marine specialists
Won’t finance a live-aboard vessel
Won’t finance a high-performance boat
No loans under $100,000
SunTrust is a part of the newly formed financial services company Truist which also includes BB&T. It also offers boat refinances, in addition to banking, investment and retirement services, as well as small business loans.
SunTrust offers marine loans for new and used boats that are over 30 feet long. It also refinances boat loans. It specializes in high-value boat purchases and only offers boat loans that are over $100,000. Rates are fixed and typically range from 4.74%–5.74% (as of January 2021) and terms go up to 20 years. You can apply in a branch or over the phone with a marine loan specialist in about 15 minutes. Funding times vary but aren’t as fast as some of the other lenders. It doesn’t have a minimum credit score requirement and doesn’t charge any loan processing fees. Downpayments of 15–25% are usually required and you can’t finance a high-performance boat or a boat that you plan to live on.
SunTrust has mixed customer reviews, with most of the negative reviews complaining about the banking services. The positive reviews boast about the customer service agents’ marine loan knowledge and responsiveness.
Best Marine Lending Specialist : Trident Funding
Why We Chose It: Our choice for the best marine lending specialist is Trident Funding because they offer competitive rates, specialize in custom marine financing, and have been in business since 1996.
Boat industry knowledge
Educates first-time purchasers
Work with multiple banks
Don’t finance boats more than 25 years old
Don’t finance live-aboard vessels
You usually need a down payment
Trident Funding was founded by boat enthusiasts for boat enthusiasts with the goal of connecting borrowers to lenders so they can finance their passion. It is the U.S.’s largest independently owned boat and yacht loan origination company. Trident also finances RVs and provides marine resources and tips on its website.
The company understands the boating business so can help educate you if this is your first boat. It has worked with over 40 banks and lenders so can rate shop to offer the most competitive rates and terms which vary based on the type of vessel, down payment amount, loan type, and borrower qualifications.
They offer fixed and variable rates starting at 4% (as of January 2021) and both short and long term boat loans up to 25 years. Typically, they approve loans within 48 hours and a down payment of 10–20% is standard. They finance new and used boats that are no older than 25 years and only used for recreational purposes.
Trident Funding has positive customer service reviews and a solid industry reputation. Customers raved about the excellent service, timely responses, and marine industry knowledge.
Best Commercial Loan : Coastal Financial
Why We Chose It: Coastal Financial is our top choice for the best commercial boat loan because the company specializes in charter boat financing and will also take care of setting up charter management and boat insurance for you.
Offers charter boat loans
Fast approval process
Offers boat insurance and charter management
No upfront rates
No published loan fees
You have to contact the company for borrower requirements
Coastal Financial offers a quick application process and fast funding. It finances new and used boats, charter boats, refinances, and RV purchases. It offers boat loans from $5,000 –$5 million and approvals take less than 24 hours. You can apply online or over the phone.
In addition to boat loans, Coastal Financial also offers U.S. Coast Guard documentation, boat insurance, and a boat charter management program. Coastal Financial offers commercial loans for yachts, fishing boats, catamarans, and sailboats. You’ll need to contact the company for loan fees and specific loan requirements and terms as they are not available on the website.
Once the borrower and vessel are approved for a charter loan, you put the boat in your company’s LLC and you can enter it into a charter program. You can choose how often you want the boat chartered, and when you want to use it, and the company will handle the rest.
Coastal Financial has mostly positive customer reviews with customers appreciating the marine industry knowledge, easy application process, and fast funding times.
All of the boat loans that made our list have different things to offer. Some only finance recreational boats and others finance live-aboard and charter boats. Rates typically start at 3.99% and go up from there depending on the type and age of the vessel, as well as the borrower qualifications. Loan terms vary greatly from 2–15 years and some companies may even go up to 25 years. All of our boat loans are offered by reputable companies with years of marine industry experience.
Although all of these loan providers have their strengths, our best overall choice is Essex Credit due to its multiple types of boat loans with competitive rates and its easy online loan application process.
|Loan Company||Why We Picked It||Average Rates*|
|Essex Credit||Multiple types of boat loans and easy application process||3.99%+|
|Southeast Financial||No minimum FICO score so borrowers may get approved without good credit||4.49%+|
|LightStream||No collateral needed for a boat loan||4.29%+|
|SunTrust||Offers loans with competitive rates for high-value boats||4.74%– 5.74%|
|Trident Funding||Marine industry experts work with multiple lenders for the best rates||4%+|
|Coastal Financial||Specializes in charter boat financing||Vary based on type of boat and borrower qualifications|
*Rates as of January 2021
What Is a Boat Loan?
A boat loan is a specific type of loan that is used to finance the purchase of a boat. The loan can be used to finance a new or used boat and may include different types of watercrafts such as jet boats, pontoon boats, sailboats, and even yachts. Rates and terms vary based on the lender, type of loan, type of boat, and borrower qualifications.
There are different types of boat loans including unsecured and secured loans, loans from online lenders, bank loans, personal loans, commercial loans, and loans that come from marine lending specialists. Boat loans typically range from two to 25 years with longer terms of 10–20 years being the most common.
Who Should Get a Boat Loan?
You should get a boat loan if:
- You want to purchase your first boat but don’t have the cash.
- You want to upgrade and buy a new boat.
- You want to buy a used boat.
- You want to refinance your current boat.
- You want to purchase a yacht and use it for charters.
A boat loan is usually not a good idea if you’re living paycheck to paycheck and aren’t sure if you will be able to make the payments on time. It’s also not a good idea if you’re not going to use your boat very much, you may be too busy, or live somewhere with a short boating season.
You want to make sure that the high associated costs of owning a boat and financing it are worth it before deciding to get a boat loan.
Can I Get a Loan for a Used Boat?
You can get a loan for a used boat but there are some limitations. The boat lender usually requires that the boat be no older than a certain age. Most lenders won’t finance a boat that was built before 1999 or 2000. However, some lenders will finance boats of any age and price range, but you may end up paying a higher rate and putting down a larger down payment.
Different lenders have varying requirements when it comes to financing used boats. Some lenders will require an inspection and an appraisal and others will only finance up to 85% LTV and will expect a down payment.
Financing a used boat is usually more affordable than financing a new boat, but it’s important to know the condition of the boat so you don’t end up with unexpected repair costs.
What’s Considered a Good Credit Score for a Boat Loan?
As noted, there are many different types of boat loans and different types of lenders that offer them. As a general rule of thumb, the higher your credit score, the lower your interest rate. This means that you will end up paying less over the term of the loan than someone with a lower credit score.
Typically, 700 is considered a good credit score for a boat loan. However, some lenders don’t require a minimum credit score or will consider your debt to income ratio, work history, and the cost of the boat alongside your credit score.
How Much Do Boat Loans Cost?
The costs of boat loans vary based on several factors including the type of loan, the type and year of the boat, the loan term, the lender, and the borrower qualifications. Typically, the most expensive cost will be the interest you pay over the life of the loan. Boat loan interest rates usually start around 3.99% and go up to 20%. Some lenders charge processing fees while others don’t charge any additional fees. Down payments are sometimes required, especially on more expensive vessels, and these may range from 10%–30% of the cost of the boat.
Some other fees to look out for when purchasing a boat include:
- Inspection fee
- Appraisal fee
- Boat insurance
- Any necessary Coast Guard licenses and fees
- Title, tax, and registration fees (varies by state)
- Docking and storage fees
- Gas (way more expensive than a car)
- Captain fees if required
- Maintenance costs
- Interior and exterior cleaning fees (typically every two weeks depending on usage and may require a diver if the boat is kept in the water)
Keep in mind that these fees vary but are typically charged on a per-foot basis, meaning the longer your boat, the higher the fees.
How We Chose the Best Boat Loans
We researched more than a dozen boat loans before choosing the top six. We reviewed the boat loans based on the types of loans they offer, loan terms, borrower qualifications, total costs, and types of boats they finance. We also considered the company’s reputation and customer reviews.
All of our choices had affordable rates, reasonable terms, and are available to a variety of buyers. They also offer financing for multiple types of boats and have good customer reviews.