Boat Financing Made Simple

Boat ownership: Big fun, and a big expense! We know this isn’t exactly news to anyone. The good news is that it’s a common and easy undertaking to get a loan to buy your boat, just like you have probably done for your house or car. The boat financing process is similar, so it should be straightforward if you have borrowed before. If you want a boat, and you’re not one of the chosen few who can pay cash for it, read on to learn more about your options.

Loan Types

Boat loans are set up as installment loans, requiring fixed monthly payments over the course of several years. The interest you pay depends on a variety of factors, including the amount of the loan; the lender; your income and credit score; and the type of loan (secured or unsecured).

With a secured loan, the boat you’re buying serves as collateral if you fail to repay the loan. Secured loans have lots of advantages with lower interest rates, higher limits, and long repayment terms. Unsecured loans have higher rates and shorter terms and do not require collateral. If you default on an unsecured loan, you don’t need to worry about your new boat being repossessed, but you could face a big drop in your credit score.

Where to Get a Boat Loan

Any big financial commitment takes some research and due diligence. Always shop around and compare terms and conditions. Here at Southeastern Marine, our financing department is dedicated to helping you with the boat loan process.

Banks

Checking with your current bank is always a good first step. They will generally offer a lower interest rate to existing customers. Rates vary depending on the loan size and the applicant’s credit score. While existing customers may get the best deals, you can still pursue loan options at any bank.

Credit Unions

Credit unions are nonprofit membership-based organizations. Expect to see fewer options and lower rates. Secured loans are their usual product, so expect that your new boat will be collateral. Credit unions may offer a higher total loan amount with a lower interest rate.

Marine Lending Specialists

These folks have lots of knowledge and experience with boat loans, pontoon financing, and more. They serve as brokers to help you secure a loan; they do not represent lenders and they don’t lend. Marine lenders will work with secured loans, which will typically require a downpayment of 20% or less.

Other Financial Considerations

The number one consideration: Please be realistic about how much you can afford to pay every month for your dream boat. Think carefully about whether you can afford it in the context of your income and other expenses. If you’re on a tight budget, you can look at used boat financing options.

We hope this information has helped you understand boat financing better! Please feel free to contact us with any questions about financing and the best financial strategy to get you on the water and having fun. Our team at Southeastern Marine in Richmond, VA, is always here to help. We’ve been serving the boating community around Arlington and Virginia Beach, and we want to help you buy the right boat for you and your family!