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How to Apply for a Boat Loan
If you know your boat loan budget, it’s time to shop for your perfect boat! Once you find it, check current interest rates.
Tell us about the type of boat you’re looking for and a few details about your financial situation and we’ll match you to the marine lender that’s right for you.
You’re all set to get on the water! We’ll finalize the paperwork and get your loan funded.
Tools to Help Guide Your Loan Process
Boat Loan Rates
Check current boat loan rates to estimate your monthly payments and interest rates with Trident Funding’s boat loan estimator.
Use our easy boat loan calculator to estimate your monthly payments or calculate your total loan amount to see how much boat you can afford.
Buying a boat can be an exciting experience. It can also be expensive. A boat is also usually a large purchase, second only to a primary residence, so most people who buy boats will get a loan to fund this major expense. A boat loan is a type of loan used to finance the purchase of a boat, such as a yacht, sailboat, or fishing boat. Boat loans are similar to other types of loans, such as auto loans or home mortgages, in that they provide borrowers with the funds needed to purchase the asset upfront, and then require the borrower to repay the loan over time, typically with interest.
Boat loans are typically secured loans, meaning that the boat serves as collateral for the loan, which can help lower the interest rate on the loan. Boat loans can be obtained from a variety of lenders and the terms and conditions of the loan will depend on the borrower’s credit history, the amount of the loan, and the length of the loan term.
Boat loans aren’t hard to get, but each lender will have their own set of boat loan requirements. You don’t have to have perfect credit or make a million dollars to get a boat loan. You will generally need a credit score of at least 600, enough money for a down payment of 10 to 20 percent of the cost of the boat, and you should be able to prove that you can afford the boat loan payments. If you’re not sure if you qualify for a boat loan, use a boat loan calculator to see how much boat you can afford and your estimated monthly payment.
Gather This Information to Get Started
- Year, make, and model of the boat you want to finance or refinance
- Sufficient income and employment history (usually at least 2 years)
- Personal information about yourself and any co-borrowers, including Social Security Number (SSN) and contact information
- Lender will also look at your payment history, pay stubs, tax returns, and sometimes your bank statements
- To expedite funding, you’ll also want to have the following documents available as PDFs or images on your phone or computer to upload via a secure document portal:
- A purchase agreement (signed by you and the seller)
- Seller’s contact information (name, email, phone number)
- A copy of your driver’s license
- Proof of down payment (Copy of down payment check or wire receipt)
How Boat Loans Work
Understand the ins and outs of boat loans before you apply
If you’re new to the boat financing process, you may wonder how boat loans work. There are a few important things you should know right up front. A boat loan works much like an auto loan but for a longer time period. Typically, boat loan terms range from 10 to 20 years. This is the length of the loan and the time period you have to pay off the loan.
This boat loan term is determined by a number of factors including the borrower’s credit score, the age of the boat, and the cost of the vessel. Typically, more expensive boats have longer loan terms, which make the monthly payments more affordable because they’re spread out over a longer period of time. For example, a $1 million yacht may have a 20-year loan term and a $50,000 fishing boat may only have a 10-year loan term. It’s important to choose a boat loan term that works best for your budget and your goals. Additionally, consider any fees or charges associated with your loan, such as origination fees, closing costs, and pre-payment penalties.
If you’re a well qualified buyer with a good credit score, you may have some say over your loan term. If you can manage higher monthly payments and want to pay the loan off as quickly as possible to avoid extra interest, then you can choose a shorter term. And vice-versa, if you want your monthly payments as low as possible, you may want to choose the longest term available.
While boat loans aren’t necessarily hard to get, you still need to be qualified. Each lender will have their own set of boat loan requirements. Just remember, boat loans aren’t hard to get if you pay your bills on time, have consistent income, can afford a boat, and have a good credit score. Boat loans are generally more difficult to get than auto loans but easier than a home mortgage.
In addition to loan terms, you should also know about a boat loan rate. This is the interest rate, you, the borrower, are being charged to borrow money from the lender to purchase the boat. You’re agreeing to pay back the loan amount plus the agreed upon interest during the loan term. Boat loan interest rates can vary greatly, so it’s important to compare rates from multiple lenders in order to find the best deal. You should also consider the size of your down payment, as this can affect the overall cost of your loan and your monthly payments.
The boat serves as collateral for the lender, in the unlikely event that you don’t pay back the loan, and nothing can be worked out. Boat loan rates vary by market conditions, the age and price of the boat, as well as the borrower’s credit score, and overall financial profile. As of March 2023, Trident Funding offers rates starting at 7.74% for well qualified borrowers with great credit scores.
When you’re ready to apply for a boat loan, there are a few requirements you need to meet. Lenders will typically require proof of income and good credit, as well as documentation about the boat you’re purchasing, such as its make and model, year, and value.
Types of Boat Loans
If you're in the market for a brand new boat, it's time to check out new boat loans so you can afford to buy that dream boat without straining your finances. The benefit of new boat loans is that marine lenders typically consider new boat loans to be less risky than used boat loans so they offer better rates and more favorable terms on new boat loans. Interest rates for new boat loans are typically lower than those for used boat loans because new boats generally hold their value better than used boats. Since new boats are more expensive than used boats, you can usually get a higher loan amount for new boat loans versus used boat loans. Also because new boats are expected to have a longer lifespan than used boats, loan terms for new boat loans are often longer than those for used boat loans.
Loans for used boats are offered by a variety of marine lenders and provide financing whether you're buying a lightly used wakeboard boat or a 15-year-old center console. A used boat loan is a type of loan that is used to finance the purchase of a pre-owned boat. Used boat loans work in the same way as new boat loans, providing borrowers with the funds necessary to purchase the boat upfront and requiring them to repay the loan over time, typically with interest. Used boat loans may have higher interest rates than new boat loans, since pre-owned boats may have a higher risk of mechanical issues or other problems. However, borrowers may be able to secure lower interest rates by making a larger down payment, having a good credit score, and selecting a shorter loan term.
Secured boat loans require you to put up collateral, such as your boat, to secure the loan. This is called the collateral. The collateral, or boat loan in this case, secures the debt, so the boat serves as collateral for the lender. Secured boat loans usually offer lower interest rates, which make them more affordable for borrowers. However, if you default on the loan, you risk losing your boat as collateral. We always recommend understanding your personal financial situation and your ability to repay the loan before choosing between a secured or unsecured boat loan.
Unsecured boat loans do not require any collateral to secure the loan. This type of loan is often more expensive than secured loans, as the lender is taking on more risk. Basically, an unsecured loan is one that is based solely on the borrower's creditworthiness and is not secured by a specific asset, such as a boat or real estate. However, if you default on the loan, the lender can only take legal action to recover the debt and cannot seize your collateral. The borrower is still responsible for repaying an unsecured loan as agreed, but the lender cannot directly seize a specific asset in the case of a default. Although unsecured boat loans are more expensive, they do not put your boat at risk if you default on the loan.
Boat Loans from Trident Funding
Trident Funding offers new and used boat loans as well as boat refinancing for various lifestyles and boat buying budgets. Our loans take into account factors such as loan amount, down payment, boat type and age, boat loan interest rates, boat loan terms and credit qualifications. We offer boat lending options for new and used boat purchases as well as boat refinancing. Our dedicated team of sales representatives guarantees professionalism and competitive rates. Let us take the guesswork out of finding the right lender, and help you sail through the process of financing a boat!
- 50+ marine lender partners to get you the best rate
- Approval as fast as 24 hours!
- 60-day deferred payment
- Minimum credit score 600+
- 10 to 20 year boat loan terms
- Boat loans from $25,000 to $2,000,000
- Zero down boat loans up to $100,000
- Stated income boat loans up to $250,000
- New boat loans
- Used boat loans
- Boat loan refinancing
- Special purpose entity (LLC or Trust) ownership*
- Recreational & limited charter options available*
- Dealer purchase and private party
*Some programs may not be available in all states. Please contact us with your specific questions and for current rate information. Let us take the guesswork out of finding the right lender, and help you sail through the process of financing a boat!
Boat Loan Resources
Frequently Asked Questions About Boat Loans
How do I apply for boat financing?
There are few simple ways you can apply for boat financing. We offer an online boat loan application or we invite you to contact one of our Trident Funding locations. The quickest way to get approved for a boat loan is to complete an online application. Our team will be notified immediately once we receive your application, and we will begin the process of getting you approved and on the water!
What information do I need to apply for a boat loan?
When you apply for a boat loan, have your tax returns and bank statements available to show your financial ability to repay. These materials will need to be submitted to speed up the review process. You’ll also need to supply information about the boat you’d like to purchase, including make, model, year, length, etc.
How long does it take to get approved for my boat loan?
After you submit your application (online is fastest!) and we have all the required financial documents, we usually have a decision in 24-48 hours, often less.
Can I get pre-approved for a boat loan?
Lenders require that a borrower identifies a particular boat before giving final approval due to the loan-to-value element, but you may be able to obtain pre-approval in some cases based on your financials and credit analysis.
How long is my boat loan approval good for?
Boat loan approvals are generally valid for 30 to 180 days and rate commitments typically range from 30 to 60 days. The length that a boat loan approval is good for will vary by lender.
Who will I work with at Trident Funding for a boat loan?
When you apply for a boat loan through Trident Funding, you’ll work with one of our trusted loan officers who will guide you through the process from start to finish. Our dedicated team of seasoned professionals will handle all your requests and questions. Our staff is ready and willing to answer all your loan related questions.
What type of boats can I finance?
We finance boats that are 20 years old or younger. Some examples include yachts, fishing boats, deck boats, pontoon boats, and sailboats. However, liveaboard boats can’t currently be financed through Trident Funding.
Are boat loans tax deductible?
Yes, your boat loan interest is tax deductible! Many boat buyers can take boat loan tax deductions as part of the home mortgage interest deduction. Your boat would need to be considered a second home for federal tax purposes, which means it includes a sleeping berth (bed), a kitchen (galley), and a bathroom (head). You must also itemize deductions in this case. We recommend consulting with your tax advisor for guidance and advice regarding your personal situation.
Does Trident finance liveaboards?
We do not finance liveaboards, but we do offer boat loan financing on various other boats including center consoles, yachts, fishing boats, deck boats, pontoon boats, and sailboats.
Can I fund my boat while it is overseas?
Each situation is unique, and we may be able to fund your boat or yacht loan while the boat is overseas. Contact a sales representative at one of our nationwide locations and they will be happy to discuss your specific transaction to see if we can assist, or if we’d need to wait until the boat is in U.S. waters.
What is an acceptable debt-to-income ratio for boat loans?
Different boat loans have different criteria, but typically, a marine lender wants to see a debt-to-income ratio of no more than 40-50% including your boat payment. The lower your debt to income ratio, the better. A lower ratio means you’re eligible for more competitive rates, better terms, and it may even mean lower lender fees.
A debt-to-income ratio (DTI) is calculated by adding up all of your monthly debt payments and dividing them by your gross monthly income. It’s a comparison of how much you owe (payments) with how much you earn (income). Expressed as a percentage, this calculation that compares your income to your debt gives lenders an idea of what the risk would be to lend you money for a boat loan. The lower the DTI the better because consumers with higher DTI ratios are generally viewed as riskier borrowers because they may have difficulty repaying a loan in full or making monthly payments.
Here’s an example of how to calculate your DTI:
Your monthly payments = $2,000
Your monthly income = $8,000
Your DTI ratio = 25% (2,000/8,000=0.25)
Is it hard to get a boat loan?
Boat loans aren’t necessarily hard to get; you just need to be qualified. You don’t have to have perfect credit or make a million dollars to get a boat loan. However, you will generally need a credit score of at least 600, enough money for a down payment of 10 to 20 percent of the cost of the boat, and you should be able to prove that you can afford the boat loan payments.
You will need to show at least two years of employment history, consistent income, and a relatively low debt-to-income ratio. Additionally, lenders will look at your payment history, your tax returns, and sometimes your bank statements. You can apply online with Trident Funding in just a few minutes and see if you’re approved within 48 hours.
After I apply for a boat loan, is there anything that I should consider before the loan is funded?
After you submit your boat loan application, it is best to hold off on any big purchases, if possible, until the loan is funded. There are a few things you should avoid during the loan process, including applying for new credit cards (also keep all existing credit card accounts open), do not max out existing credit cards, do not buy a new car or do a trade in. It is best to keep in touch with your boat loan officer to ensure you are taking the right steps to close the deal on time.
How much do I have to put down on my boat loan?
Most boat loans require a down payment of 10% to 20%. For example, if you’re purchasing a boat for $75,000, you may be asked to put down $7,500 to $15,000. The down payment requirements vary based on the loan amount and the borrower’s qualifications. Feel free to contact one of our knowledgeable loan officers to help answer any questions you have regarding boat loan down payments. Trident Funding also offers zero down boat financing for loans up to $100,000.
Are there prepayment penalties on boat loans?
There can be a prepayment penalty on boat loans depending on the lender and the loan amount. Boat loans have an expected payoff date, and if you pay off your loan before that date, you may be charged a prepayment penalty. A prepayment penalty is a fee that banks or lenders charge if you pay off your loan early. The amount and if the penalty exists will be stated in your boat loan documents and will be listed under the prepayment penalty clause. It’s a good idea to ask the lender upfront about all loan-related fees including a prepayment penalty, so there aren’t any nasty surprises later on.
Can I finance the sales tax on my boat purchase?
While there is no federal tax imposed on a boat purchase, there are state and local taxes. In many cases you can finance the sales tax on your boat or yacht purchase within your loan. We recommend checking with your local state office to see if they have any specific requirements. The sales-tax rate varies from state to state. Some states do not require a sales tax at all when you purchase a boat or a yacht, and in some states, sales tax is only applied up to a certain amount of the boat’s purchase price. Other factors such as lending limits, down payment, and amount financed can impact whether you can finance the sales tax on your boat purchase.
Do you offer stated income boat loans?
Yes, we offer stated income boat loans up to $250,000! A stated income loan means the lender does not verify a borrower’s income using any records, such as paystubs, W-2 (employee income) forms, tax returns or other records. Borrowers are just asked to state their income, and lenders take them at at their word. However, we would likely need to request further verification in certain circumstances depending on your FICO score or boat loan structure.
Is U.S. Coast Guard documentation required for my boat loan?
Although U.S. Coast Guard documentation is not required for a boat loan, when financing your boat, most lenders will require the boat is U.S. Coast Guard documented. If the lender does not require USCG documentation, they may still provide better terms if you agree to have the boat documented with the Coast Guard. U.S. Coast Guard documentation is generally only required by marine lenders on transactions of certain sizes as well as for boats of certain tonnage that meet USCG requirements.
Can you assist with U.S. Coast Guard documentation, registration, and titling for my boat loan?
We assist with all aspects of documentation, registration and tilting when you finance your boat loan through Trident Funding. From loan application to funding, we help answer any questions you have and connect you with any third-party services required to get your boat loan funded to get you on the water!
What is the oldest boat Trident finances?
Our network of marine lenders generally offers used and refinancing on boats as old as 20 years. We work with you to get the best boat loan rate on any new or used boat purchase.
Is a marine survey required for boat loans?
Yes, lenders generally require a marine survey on used boats or yachts when you take out a boat loan. This allows the lender to confirm the boat’s condition and verify other items (registration, hull, and engine numbers) before they approve boat loan funding. Marine surveys also provide customer insight into potential future costs of ownership (i.e. fixes, improvements, etc.) and also help owners determine if they are carrying the proper amount of insurance coverage.
We recommend all used boat buyers hire a marine surveyor to verify the boat’s condition prior to purchase. You can check with the National Association of Marine Surveyors and the Society of Accredited Marine Surveyors. Members of these two national organizations provide marine survey services.
Can I refinance my boat loan?
Yes, you may be able to refinance your boat loan if you want to lower your monthly payments or if you want to pay off your loan faster. Refinancing a boat loan may require you to reapply for the loan and may involve additional fees.
What happens if I default on my boat loan?
If you default on your boat loan, the lender may repossess the boat and sell it to recover their losses. Defaulting on a boat loan can also have negative impacts on your credit score and may make it more difficult for you to obtain financing in the future.