Ready to buy a boat? Use our easy boat loan calculator to estimate your monthly payments or calculate your total loan amount.
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*Estimated APR, or Annual Percentage Rate, is the annual cost of the loan, which includes other charges and fees. Actual rate and term can vary depending on credit history, collateral type, age of collateral, loan amount, loan term, loan to value, vessel registration type (LLC/Trust), state of residency and other criteria. Rates and terms may vary and are subject to change without notice. Credit score can vary depending on the credit reporting agency. Payment example: A $76,000 loan for the purchase of a recreational use vessel for 20 years with a fixed rate of 5.49% would have an estimated APR of 5.49% and 240 payments of $522.37.
How Trident Funding Boat Loans Work
Frequently Asked Questions
Typically, the maximum term for a boat loan is 20 years, however the maximum or standard term for a boat loan can be affected by the age of the boat and the size of the loan request. The next most common terms are 15 and 10 years.
Check out a yacht loan calculator, to see how much yacht you can afford. Affordability will be based on things like your income, credit score, debt-to-income ratio, purchase price of the boat, loan term, and interest rate. When you see the estimated yacht loan monthly payment, remember that it doesn’t include insurance, marina fees, docking or storage fees, maintenance, repairs, fuel, license, or crew costs. So, make sure there is room in your budget to allow for these extra expenses.
Financing a boat over a 15 or 20 year term is very common. Banks tend to offer longer terms on boat loans because the depreciation schedule of a boat is typically longer than other assets like automobiles.
Yes, you can get a 20-year term on a used boat. However, the boat usually needs to be less than 15 years old, and most lenders will also have a minimum loan requirement in order to qualify for a 20 year boat loan term.
You can get a boat loan with a 700 credit score, but most lenders prefer credit scores of 700 or higher. With a lower credit score, you should expect a larger down payment or a higher boat loan interest rate. Use our boat loan calculator to estimate your monthly interest rate and then apply for your boat loan today.
You can purchase a yacht with bad credit, but you probably won’t qualify for yacht loans if you have bad credit. If your credit score is below 680, you may need to pay cash for the boat, work out an owner financing arrangement with the seller, or put down a large down payment. Other options may include taking out a personal loan, getting a loan from your credit union, or using yacht dealer financing. Some yacht loans may allow a qualified cosigner but the cosigner would have to meet the lender’s criteria and agree to be responsible for the loan.
Keep in mind that some lenders won’t work with you at all if your credit score is below 680, so it may be advantageous to raise your credit score first and then apply for a boat loan. The best interest rates and terms are reserved for the most credit-worthy borrowers. So, having a higher credit score will save you money over the term of the loan.
Having a high credit score to finance a boat will save you money in a few different ways. Firstly, you will get access to the best rates, terms, discounts, and the lowest-fee boat loans. You may also be able to choose your loan term, and your down payment requirements may be lower.
For example, if you can afford the higher monthly payment of a seven year loan term, instead of a twenty year loan term, you can potentially save thousands of dollars in interest because you will be paying off the loan over a shorter period of time.
However, the main way that you save money on a boat loan is with a lower interest rate. Assuming that you have a high credit score, and get a 5.25% rate on a $200,000 boat loan, with a term of twenty years, you will have paid a total of $323,445.20 for the boat over the twenty year term. This only includes principal and interest and is only applicable if you have a fixed rate loan.
Now, let’s assume your credit score isn’t great, and you get a 9.0% interest rate on the same $200,000 loan. You will have paid a total of $431,868.46. That means that a borrower with a higher credit score will have spent $108,423.26 less than the borrower with the lower credit score. That’s a huge amount of money that could be invested or even used to buy another boat!
Boat loan terms vary in length, anywhere from seven to twenty years, and occasionally twenty five years. There isn’t really a ‘best’ when it comes to boat loan terms. It’s all relative to your financial situation, the year of the boat, and the loan amount. If you have the extra money budgeted for larger monthly payments, and don’t want to pay additional interest, then a shorter-term boat loan may be better for you.
Conversely, if you’re buying an expensive boat, and want the cheapest monthly payments available, then a twenty year boat loan term may be more suitable for you. When you apply with Trident Funding, they will go over different boat loan terms, interest rates, and monthly payment options with you.
There is no definitive minimum credit score required, but there are some banks that will consider applicants with scores in the 640 or 670 range. You will typically need a credit score of at least 680 to get approved for a boat loan. The higher your credit score, the lower your interest rate will be, which will save you money over the term of the loan. Additional credit limitations and requirements will typically be required for scores under 700. Use our boat loan calculator above to determine your estimated monthly payment based on your FICO credit score.
Some tips to raise your credit score include
- Make on-time payments to your creditors
- Ask for credit limit increases on your credit cards but don’t use the additional credit
- Pay down your credit card balances so they’re 25 percent or lower
- Regularly check your credit report and dispute any errors
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 loan officer to ensure you are taking the right steps to close the deal on time.
The amount of boat that you can afford depends on a number of factors. It will depend on your income, your credit score, and your liabilities. You may qualify for a million dollar boat solely based on your income, but when you factor in your monthly expenses, that number may change drastically.
The lender will take a look at your overall financial profile including your debt-to-income ratio to ensure that you can afford to purchase the boat and keep up with the monthly payments. You can check out a boat loan calculator to get an idea of how much boat you can afford. The calculator is a great place to start when you’re boat shopping, but don’t forget about additional expenses such as boat insurance, marina fees, and ongoing maintenance costs.
Yacht loan terms typically go up to 20 years, but you may find one for twenty-five years if you and the boat meet certain qualifications. A yacht loan is different from a mortgage, it’s more comparable to an auto loan, just with a longer loan term.
The yacht serves as the collateral and you typically use your own funds for a downpayment and finance the remainder of the purchase price. You will pay monthly payments throughout the life of the loan. Like auto loans, yacht loans require insurance and each lender will have their own qualifications that need to be met in order to be approved for the loan.
A good credit score to finance a boat is typically 680 or higher. Most marine lenders only work with creditworthy borrowers who have what is considered great or excellent credit. Sure, you may qualify for a loan with a lower credit score, but the maximum loan amount may be lower, the monthly payment may be higher, your loan application may take longer for credit approval, and you may be required to put down a larger down payment than a borrower who has a higher credit score.
If you’re not sure what your credit score is, or you want to know if you will get approved for a boat loan or not, apply with Trident Funding online in just a few minutes. The initial application only requires a soft-pull on your credit score, and you will quickly find out if a boat loan is in your near future, or if you need to raise your credit score first.
The length of the loan is referred to as a loan term. Loan terms vary depending on the loan product, the type of boat, the age of the boat, the loam amount, and your financial standing. However, most boat loans range from seven to 20 year. A 20-year term is usually the maximum term for a boat loan, however, sometimes a lender will consider a 25-year loan term. The next most common boat loan terms are 15 and 10 years. Typically loan amounts over $50,000 can go to 15-20 years and loan amounts under $50,000 can go to 12-15 years.
The amount of the down payment on a boat loan varies. It’s usually anywhere from ten percent to more than thirty percent. It depends on the borrower’s credit score, income, and overall financial profile. It also depends on the loan amount and the loan term. Generally, borrowers with lower credit scores will be required to put down a larger down payment. This is to mitigate some of the lender’s risk and it shows ‘more skin in the game’ because the borrower has more to lose if they default on the loan.
If you like to know the numbers and want specifics, here goes. The average cost of a new boat is around $70,000. If you have excellent credit, expect to put down at least $7,000. If your credit is less than excellent, you may need to put down anywhere from $14,000 to more than $21,000. This is just the amount needed for the downpayment and doesn’t include closing costs or insurance etc.
Every borrower is different and their credit score and income will affect the boat payment. The interest rate, the boat term, and the purchase price of the boat will also affect the amount of the monthly payment. If you want to roughly estimate what your boat payment will be, calculate 1 to 1.5% of the value of the boat. For example, if you buy a boat worth $100,000, expect to pay between $1,000 and $1,500 per month. Keep in mind, this is just a rough estimate, and you can get a better idea of your monthly payment, by using a boat loan calculator.