Best Boat Loans in 2023: Finance Your Boat
Our pick for
Unsecured boat loans
How do boat loans work?
A boat loan is an installment loan with fixed monthly payments typically over two to 20 years. You can get a boat loan from a bank, credit union or online lender.
Interest rates and loan terms vary based on the lender, the size of the loan, your credit score and income, and whether the loan is secured by the boat or unsecured.
Applying for an unsecured boat loan is typically fast, and some loans can be funded the same or next day after you’re approved. Lenders usually deposit the funds into your bank account, from which you can withdraw the money to purchase a boat.
Secured boat loans vs. unsecured boat loans
Boat loans can be secured by the boat or unsecured and backed by your signature. Here are basic differences.
Secured boat loans
Secured boat loans use the purchased boat as collateral. They may have higher loan amounts, longer repayment terms and lower rates than unsecured loans. The risk is that you can lose your boat if you default.
With a secured boat loan, you may also need to make a down payment, which means you’ll need cash upfront.
Secured loans work best for borrowers who don’t qualify for an unsecured loan, want a higher loan amount and are comfortable with the risk associated with secured loans.
Unsecured boat loans
An unsecured boat loan doesn’t use the boat or anything tangible as collateral. Without that backing, rates on unsecured loans may be higher and terms shorter.
Approval for an unsecured boat loan is based on factors like your credit score, income and existing debt.
If you default on an unsecured loan, you may not lose the boat, but you’ll still face consequences, including a damaged credit score and wage garnishment if the lender takes you to court.
Pros and cons of secured and unsecured boat loans
Secured boat loans
Unsecured boat loans
How long are boat loans?
Repayment periods for boat loans vary depending on the type of loan you choose.
Unsecured personal loans typically have shorter repayment periods — two to seven years. If you choose a secured boat loan, your term can be as long as 20 years.
Keep in mind the term you choose affects the interest you pay. Shorter terms have higher monthly payments but carry less interest.
For example, a four-year, $30,000 boat loan with an annual percentage rate of 15% will have monthly payments of $835 and cost $10,076 in interest. The same loan with an eight-year repayment term will have monthly payments of $538 and cost $21,683 in interest.
Use NerdWallet’s boat loan calculator to calculate your boat payments.
What is the average interest rate on a boat loan?
Boat loan interest rates vary by lender. An unsecured boat loan will have an annual percentage rate ranging from 6% to 36%. See the table below for average unsecured interest rates based on your credit bracket.
Borrower credit rating
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified in NerdWallet’s lender marketplace from Aug. 1, 2023, through Aug. 31, 2023. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum APRs below 36%.
Secured loans may have lower APRs, with many lenders offering single-digit rates. If you're not sure what credit bracket you fall into, check your credit score for free on NerdWallet.
Where to get a boat loan
In addition to getting a boat loan from an online lender, you can also get a secured boat loan from a bank, credit union or marine lending specialist. Here are some examples.
Secured boat loans from banks
You’re more likely to find secured loans from banks. Banks may offer perks to existing customers, like discounts and favorable loan terms. If your bank offers boat loans, it’s a good place to start.
Bank of the West
Bank of the West offers boat loans in all 50 states, but not in Washington, D.C. You can submit your application online. You'll then be assigned a sales representative who will work with you to close the loan.
Loan amount: $10,000 to $5 million.
Rates: 4.24% to 10.49%.
Terms: 4 to 20 years.
U.S. Bank’s boat loans are available in the 25 states where the bank has branches. You may have to visit a branch to close a boat loan, but the bank says it can make same-day preapproval decisions.
Loan amounts: $25,000 to $150,000.
Rates: Starting at 5.24%.
Terms: 1 to 20 years.
USAA works primarily with military members and their families. Though you can apply online, you must call USAA to complete your application.
Loan amounts: $5,000 to $500,000.
Rates: Starting at 6.20%.
Terms: 1 to 15 years.
Truist Bank has locations primarily along the East Coast, and existing account holders can apply by phone. Those without accounts will need to apply in person.
Loan amounts: Starting at $3,500.
Rates: 6.30% to 8.52%.
Terms: Up to 20-years.
Secured boat loans from credit unions
Credit unions can offer low-rate secured boat loans to their members. These not-for-profit lenders may look past a low credit score or rocky credit history on a loan application and consider a borrower’s whole financial picture, including the relationship with the credit union.
Your local credit union is a good first stop, though national credit unions also offer boat loans. Navy Federal and First Tech, for example, both offer boat loans with 15-year repayment terms with rates starting below 10%.
Loans from marine lending specialists
Marine lending specialists are financial service companies that act as brokers to find you a boat loan. They secure funding through outside sources such as banks.
Boat loans from marine lenders may have similar rates and repayment terms to personal loans. One advantage might be the ability to work with a specialist who understands the boating business, according to the National Marine Lenders Association.
These loans must be secured by the boat and require down payments from 10% to 20% of the purchase price.
How to get a boat loan
To get boat financing directly from a lender, you’ll need to apply for a loan. Most loan applications are online and require you to submit personal information like your name, address, contact information and Social Security number. You may also need to submit proof of identity, employment and income.
If you’re applying for a secured loan, you’ll want to have information about the boat on hand, including the builder or manufacturer, model, model year and purchase price.
Once you submit your application, you’ll wait for an approval decision. If you’re approved, you may need to visit the bank or credit union to close the loan and receive funds. Unsecured personal loans, especially from an online lender, can typically be closed online and funded the same or next business day.
Can I get a boat loan with bad credit?
Borrowers with bad credit may still qualify for a boat loan. Some online lenders offer unsecured personal loans specifically to borrowers with bad credit.
Secured loans from a bank or credit union may also be a smart option for borrowers with bad credit since approval decisions rely less on their credit.
» COMPARE: Best unsecured loans for bad credit
Alternatives to boat loans
Financial experts don't recommend personal loans for discretionary purposes, particularly if you already carry credit card or other debt. If you can’t afford to buy a boat today, or you’re not quite ready to make the commitment, here are some alternatives.
Save up for the purchase. Consider holding off and starting a savings plan toward buying a boat. You may be able to negotiate a cheaper price by paying with cash, and you’ll avoid paying interest on a loan.
Join a boat club. For a one-time fee and ongoing monthly or annual dues, boat clubs provide access to a fleet of boats for their members and guests.
Consider peer-to-peer rentals. Similar to renting a house on Airbnb, you can temporarily rent a boat through a peer-to-peer rental marketplace, such as Boatsetter or GetMyBoat.
Last updated on April 19, 2022
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Frequently asked questions
- What are typical boat loan terms?
Boat loan repayment terms are usually between two and 20 years. Unsecured boat loans have shorter repayment terms — about two to seven years — while secured boat loans have longer terms. Calculate your boat loan payments to see how the term affects your monthly payments and overall interest.
- Can you get a loan for a used boat?
You can find secured boat loans for used boats at U.S. Bank and Bank of the West, among others. With a secured loan, a lender may consider the boat's age and how much it has been driven when deciding your rate and loan term. With an unsecured loan, that information doesn't usually factor into your rate and term.
- What credit score do you need for a boat loan?
Most lenders want to see a good credit score of 690 FICO or higher on a boat loan. You may qualify for a secured or unsecured boat loan with a lower credit score, but borrowers with fair or bad scores (below 690 FICO) are likely to receive higher annual percentage rates.