Boat Loan Calculator – For Buying New & Used Boats

The price of a boat goes beyond simple ownership. But the value of owning one also goes beyond the initial cost.

Buying a boat can seem overwhelming. Whether used or new, it’s possible and not that unusual to borrow money to get one. Below, we’ve illustrated the prices for specific kinds of boats.

A loan for a boat might be a personal installment agreement, whereby borrowing money will involve paying it back monthly plus the interest rate, or bank rate. A 10%-20% downpayment isn’t unusual from a dealer at a marina and financing may run between 3%-9%.

Here’s how to do it works. Let’s dive in and look at some sources of boat financing and examine the details of what a sample deal might look like for your dream machine.

The Boat Buying Process

Buying a boat can be a confusing process. There are similarities with other big purchases, like buying a car or closing on a house—but there are also important differences. The smaller the boat, the easier the process.

Here are the basic steps to the typical boat-buying transaction.

1. Find the Boat

If you know the boat you want, it’s easier. If not, visit a boat show and step aboard the different watercraft. You can even get a chance to go for a ride sometimes.

Research sites like ours for reviews and investigate further until you trust your gut and your reason. Pontoon boats are less complicated than cabin cruisers for example, so keep that in mind.

Find the boat you like and submit a conditional offer. Offers are nearly always (but not every time) conditional on survey or mechanical inspection, sea trial, and sometimes on financing and insurance.

2. Read the Boat Survey

Get a boat survey, the marine equivalent of a home inspection. As the buyer, you might be responsible for the cost of the survey, haul-out for inspection (yard fees), plus any captain that might need to be hired for the sea trial.

Putting this in the sellers responsibility can also be a condition of the purchase or a negotiating piece. Some sellers may have this already. Additionally, a boat survey for insurance is sometimes needed, but not always.

On smaller boats, the “survey” may be a simpler mechanic’s inspection. But smaller watercraft insurance will still be needed in some cases too.

Marine surveyors are accredited and will submit a report detailing the value and condition of the vessel, including any safety considerations. The buyer hires the surveyor, so they should serve your interest.

Always be wary of using surveyors recommended by the seller or the seller’s broker.

The survey should include an out-of-the-water hull inspection and a sea trial that includes running at full power. Financing and insurance coverage will always depend on the formal surveyor’s report.

3. The surveyor’s report may include items that change the deal (i.e., it might need to be renegotiated, concessions made on the seller’s part, etc.)

Remember, if the survey returns a market value less than the original offer, your lender will unlikely finance the original amount. Once new terms are agreed upon, you will sign a document saying you accept the vessel under these new terms.

4. Close the Deal

The deal can be closed once you’ve accepted the vessel and financing and insurance are finalized. The financing company will likely take care of closing, but sometimes brokerages may have their own closing departments. If you’re working on your own, there are yacht closing specialists you can hire to do all the paperwork. You’re responsible for all closing and loan costs, while the seller pays the broker (typically 10 percent of the contracted price).

If you’re unfamiliar with the type of boat you’re buying or new to the process, working with a yacht broker can be helpful. It’s very important to realize that brokers usually work solely for the sellers they represent. If you want the benefit of their help and expertise, investigate hiring your own “buyer’s broker” to represent you. They’ll walk you through the process and steer you in the right direction if things get tricky.

It’s also notable that plenty of folks are willing to lend a hand. Some experienced boaters act as consultants, helping newcomers find and buy the right boat. You can also contact industry professionals for help, such as ABYC Certified Advisors.

Used Boats vs. New

Whether you buy your boat from a dealership, through a broker, or directly from the seller, you can usually get financing for it. But financing will come with its own requirements.

As is the case when you purchase a home, the finance company will only finance the vessel for what is worth. So, a marine survey is nearly always required. This survey will give a professional estimate of its value and whether or not it’s in seaworthy condition.

Not every boat can be financed. Many lenders won’t touch boats that are too old, regardless of how well it has been cared for. If the vessel of your dreams is 20 years or older, you may have to devise an alternative funding arrangement. The same applies if a project boat “needs a little work.” Lenders will only finance the purchase if they know the boat has a solid resale value and stands up as collateral. Each lender has their own requirements, so you must read all the fine print.

For financing, buying new is usually the easiest path. Dealers will have a financing department, similar to how you purchase a car. Of course, the dealership just happens to have a deal with a lender they work with. You can also come to the dealer with pre-arranged financing, enabling you to negotiate the deal more clearly.

Key Considerations When Financing a Boat

You’ll have to have insurance coverage if you finance the boat. This is actually the boat buyer’s most difficult hurdle. Yacht policy underwriters have become stricter in recent years as underwriters carefully evaluate each owner’s experience, training, and plans for their boat.

You might need help finding a company that will underwrite your policy, especially if you are new to boating or looking to buy something significantly bigger than you’ve ever had. Underwriters may also have policies against cruising in certain regions at certain times of the year and against living aboard your yacht full-time. It varies from company to company and yacht to yacht.

Check the Marine Lenders Association for some reputable loan providers.

Insurance coverage has become such a hurdle that many yacht brokers now encourage buyers to start their boat search by finding their underwriter first. If you’re buying a small (less than 25 feet) boat for occasional recreational use, your homeowner’s policy underwriter is the best place to start. If you’re looking for a larger yacht or plan on boating in the hurricane zones, you’ll probably need to find a marine insurance broker who can help guide you to the right underwriter.

Getting the Loan

The lending process for a boat is comparable to buying a recreational vehicle or a second home. To that end, realize there aren’t many special offers available, and you will almost certainly have to put at least 20 percent down. Boats are typically financed for 10 to 20-year terms, but this depends on the boat’s age and the loan amount.

Most lenders consider a boat a “luxury” good, so you’ll need decent credit to qualify. Usually, this means a credit score of 600 or better. It also means you shouldn’t expect amazing interest rates, even with great credit.

Still there are some providers that will offer boat loans to people without good credit. iNet financial is one of them. Expect 7% or more.

For those with good credit, another option is the unsecured boat loan. In these cases, a lender provides you the cash necessary to purchase whatever you like with repayment terms that you know in advance. The rates could be better, but they often have fewer fees and greater flexibility in your purchase decisions. Likewise, you might consider personal loans or home equity loans as alternatives.

Find the Best Boat Loans

Here’s a list of places to start looking if you are in the market for a boat loan. Many boat sales websites can point you to a lender. As always, it’s worth shopping for the best rates and lowest fees!

• Dealer, manufacturer, or seller financing
• Traditional lenders, like your personal bank or credit union
• Specialist programs for boat buyers, like BoatUS/Trident Financial (a buyer’s broker may be able to recommend one)
• Home equity loans or lines of credit
• Personal loans
• Unsecured loans
• Pay cash and avoid financing

Comparing Boat Loans

Shopping online, you’re bound to find tons of links for boat loan programs. Yacht World even estimates their listings in terms of monthly payments, assuming twenty years at the current base rate. Let’s look at how some typical boat purchases would break down if you financed them. https://www.yachtworld.com

How Much for a Jon Boat?

Among our top picks in the jon boat category is the Lowes L1648M. This simple, outboard-powered aluminum fishing boat comes with the bare minimum to get started. It’s priced accordingly, too, starting at just $5,249.

The Lowe’s website quotes this boat at $36.90 per month, assuming you put $1,500 down and financed it over 15 years at 8.49% APR. 

But this cost doesn’t include everything you’d want to get boating. If you want a trailer and a motor, that cost will more than double. The prices listed on the website also don’t include freight or boat delivery, taxes, fees, or registration.

This is an example where working with a dealer might be helpful. They will outfit these boats with all the components you need and give you the option to finance them as a whole. Another option is to look for this boat on the used market, where someone has already outfitted it the way you want.

How Much For a BowRider?

Boat & Sail Magazine’s top pick for bow rider is the Sea Ray SLX 350. Sea Rays aren’t exactly known for being bargain boats. Once we finished building the boat on their website with the engine upgrades and canvas options that most owners would consider the minimum, the base price of the boat came to $407,249. The Sea Ray website includes a loan calculator, but it gives you a rough idea without any special offers or details.

We can make a few assumptions and determine what a rough closing sheet might look like for this transaction. These numbers are for illustrative purposes and depend on your location and dealer.

How Much For a Motor Yacht?

Finally, what if you’re ready for the big time with a motor yacht? Yachts are harder to pin down pricing since their manufacturer is usually done on a custom basis. Instead of being sold at dealers, new vessels are ordered through brokers.  

Boat & Sail Magazine’s favorite classic motor yacht is the drool-worthy Fleming 55. As many buyers would do, we can turn to the used market for an estimate on pricing. A quick search of Yacht World shows that the six pre-owned Fleming 55s currently listed have a mean asking price of somewhere around $1.2 million. 

Asking prices are always a bit high since sellers expect offers on the boat.

This is another area where hiring your own buyer’s broker can be valuable. They can perform a detailed price analysis based on previous sales in the Yacht World database—information the general public cannot access. That can tell you what these yachts truly sell for and what a fair offer would look like.

Since we don’t have access to that level of information, we’ll assume that a yacht in excellent condition in a competitive market would go under contract for 90 percent of its asking price. A yacht that has sat on the market too long and needs work might go for much less.

Using the Yacht World finance tool for an example yacht, here’s what you might expect financing to look like. We’ll leave taxes and closing fees off since deals like this might be international or done through holding companies. But, needless to say, there will be more costs associated with this deal than those listed here!

Is Financing a Boat Worth It?

While you can finance many different boats, whether it works for you and your budget is a personal question only you can answer. It’s normal to finance boats.  People leverage their money and assets in different ways at different times. But it’s also important to consider the boat in question.

The importance of getting a reliable and thorough marine survey must be emphasized. This step protects you, ensures your insurance company of the soundness of the vessel, and secures its value with the lender.

Read more on Boats:

• Your Guide on Nautical Flags
• Boating Right of Way Rules
• Good Boat Names