Boat Loan Financing Basics When Purchasing New or Used Boats

Review of what to expect in the boat loan financing process when buying a new or used boat, including the basics of financing and how to find a marine lender

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Whether you are a new boater looking to buy your first boat or an existing boater looking to upgrade to a bigger boat, boat loan financing can assist buyers in the purchase process. Purchasing a boat can be more affordable than boaters may initially think.

With boat loan financing at competitive interest rates and long loan terms, payments can be comparable to a car loan for many boats. Buyer should understand the basics of the boat loan financing process to get the best deal on a new loan when purchasing their next new or used boat.

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Basics of Boat Loan Financing

Financing a new or used boat purchase with a boat loan can help to minimize necessary cash outlay when buying a boat. A low down payment combined with low monthly payments that can span over 5, 10, 15 or even 20 years can make the purchase of a new or used boat easier on a bank account and on a budget.

If your boat has a head, galley and a sleeping berth then it qualifies as a second home and boat loan interest can be deducted on your federal tax returns in the U.S.

Boat loans can be acquired as fixed rate loans, variable rate loans or balloon rate loans. Most boat buyers prefer to have the reliability monthly payment of a fixed rate loan, as opposed to an unpredictable variable rate loan with tempting low introductory rates.

Balloon rate loans are good for boat buyers that are planning to pay the full price of the boat at the end of a fixed loan term. Boat loan financing can be acquired when purchasing a used boat, new boat or even a repossessed boat. Available boat loan terms and rates may vary based on the age of the boat, condition of the boat, type of boat and personal financing qualifications.

For example, buyers may get a good deal buying a used boat, but boat loan financing with extended loan terms on an older boat may be more difficult to obtain.

How to Find a Marine Lender when Financing a Boat

Identifying a marine lender that is experienced with the process of financing a boat will make the boat loan process easier for buyers. Marine lender specialists will be most familiar with determining appropriate boat appraisal and resale value – an important step in the loan approval process. Their experience with the boat buying process can also help streamline credit decisions and allow for more flexibility with loan terms.

The National Marine Banker’s Association (NMBA), a national organization of marine lending specialists, is a good source for finding a marine lender when financing a boat. Marine lenders can be large national banks, smaller local banks, credit unions or other financing institutions.

If buying a boat for sale by owner, it will likely be entirely up to the buyer to identify an appropriate marine lender. However, buying a boat with a dealer may have advantages for obtaining boat loan financing. Many boat dealers have relationships with marine lenders and can be very helpful identifying a marine lender and assisting in the boat loan financing process for new or used boat purchases.

When buying a new boat, dealers can often help boat buyers attain additional manufacturer incentives. Such as special financing rates, extended warranties, and no collateral loans with special loan terms. However, rates and terms can vary by a lender with any loan process. Therefore, multiple quotes from marine lenders are always recommended for getting the best rates and terms for boat loan financing.

Sources:, National Marine Banker’s Association

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Diane Seltzer

View posts by Diane Seltzer
Diane is the founder of as well as the boating lifestyle site for kids Active in the boating industry, Diane has also led the marketing for multiple recreational boating businesses and startups.

1 Comment

  1. Maggie AllenMay 26, 2016

    My husband and I really want to buy a boat, but since this is the first time, we don’t know very much about financing one. It’s good to know that you can have terms anywhere from 5 to 20 years. Since we have saved up quite a bit of money, we are hoping that we can get a five year loan, but we also wouldn’t mind ten years. We’ll just have to see what our options are when we start looking!

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