Frequently Asked Questions
About Boat Loan Interest Rates

Owning a boat is a goal for so many people. It’s considered different things to different people: a source of pride, happiness, a status symbol, an investment, and even a business that keeps your family afloat. It’s also a sure fire way to enjoy leisure time, have fun, get outside, and create memories. 

However, boats have a reputation of being notoriously expensive, but they don’t have to be unattainable for you. Check out Trident Funding’s free online boat loan calculator to see how much boat you can afford and what your approximate monthly payment will be. It may be more affordable than you expected. Just remember to add in the cost of boat storage and boat insurance when calculating your monthly payments. 

Once you decide on a boat that fits your budget, and you’re happy with the approximate monthly payment, check out another cool tool: the boat loan rates estimator. This tool is updated daily and provides actual current boat rates based on if the boat is new or used, the year of the boat, the amount of the loan, and your credit score range. 

Now, let’s take a dive into the deep blue waters of boat interest rates:

What are the best boat loan rates?

As of December 2022, the best interest rates for boat loans typically start around 6.37%. Of course, these rates fluctuate with market conditions, inflation, and supply and demand. The best boat loan rates are also reserved for the borrowers with the highest credit scores and strongest overall financial profiles. 

If you want to see what your boat loan rate might be, check out the boat loan rate estimator. You simply input if you’re purchasing a new or used boat or refinancing a boat. Then, type in the year of the boat, the loan amount, and the range of your FICO score. For example, if you have a 720 FICO score, you would select the 700-739 box. Then the calculator will show what your estimated monthly payment will be and what your expected interest rate will be. 

There are many different lenders and their rates will vary on loans for boats. Check your estimated boat interest rate with our boat loan estimator. Most lenders base their boat loan interest rates on factors such as:

      • Credit score
      • Loan amount
      • Down payment
      • Loan term
      • Age of the vessel

How do I get the best boat loan rate?

You can’t control the market and increasing interest rates, so instead focus on the things you can control that will help you get the best boat loan rate. For example, the higher your credit score, the lower your interest rate will be.

Making on-time payments, paying off credit cards in full each month, and keeping your credit utilization levels low can all help to increase your credit score. Which in turn, will give you access to the best boat loan rate. Additionally, putting a large down payment on the boat will lower your loan to value ratio, which can also lower your boat loan rate. Low rates are reserved for ‘low risk’ borrowers which are borrowers with higher credit scores, substantial incomes, strong employment histories, and lower debt-to-income ratios. Competitive boat loan rates currently range from about 6.37% to over 7%.

How do some lenders show less than 3% boat interest rates?

The internet is full of click-bait tactics, false advertising, promotions that don’t really exist, and rates that aren’t updated and don’t fit the product they’re being advertised for. Unfortunately, this is often the reality for the super low interest rates that some boat lenders claim to offer. Once you further inquire about these low interest rates, they have either expired, don’t apply to loans for boats, or are ‘conveniently’ no longer available. 

In some cases, the companies are fly-by-the night companies looking to make some quick money before changing names or going out of business. In other cases, the rate may be low but the lender fees, points, application fees, origination fees, and a whole lot of other fees make the boat no longer affordable. 

But, let’s assume that you found a low interest rate, possibly 3%, 3.5% or even a rate under 3%, and it’s a real rate offered by an actual company that has been in business for a while. So, what’s the catch? The loan term is for three years! You think, okay, no big deal, my car loan is a three year term, but a boat loan is usually for a much larger amount than a car loan, so your monthly payment is going to be huge! It may be even more expensive than your mortgage. And that is not the goal of loans for boats.

Let’s take a look at an example. You want to purchase a new cabin cruiser so you and your family can spend days and even a couple nights onboard without spending the extra money for a yacht. You want a nice model that’s luxurious but maybe not the very top of the line model. Expect to spend upwards of $100,000. Let’s say the final cost of the boat is $120,000. 

You put down a down payment of 20% which is $24,000, so your boat loan amount will be $96,000. This is the cost of the boat minus the down payment. Now, let’s assume, you have excellent, top-tier credit, a score of 800 or above, substantial income, and an acceptable debt-to-income ratio, etc., and meet all the other lender criteria. You qualify for a 3% boat interest rate. This means your monthly payment will be approximately $2,792. That does not include the costs of insuring your boat, storing it, maintaining it, docking it, or cleaning it. For most people, that monthly payment is unmanageable, not affordable, and it’s hard to even contemplate spending that much on a boat. I mean, it’s not a yacht with a helipad and a jacuzzi!  

That’s exactly why reputable boat lenders and marine financing companies offer longer boat loan terms, typically between 10 and 20 years. These longer loan terms shrink your monthly payment, making it more affordable. 

So, next time you see those low boat interest rates creeping up on your computer screen, make sure you find out all of the details, including how long the loan term is for.

How does Trident Funding help me get the best boat loan rate?

Trident Funding works with a network of more than 14 lenders to get customers the best rate for their lifestyle and their budget. We have a white glove approach for our customers and offer personalized, boutique style service. We have six branch offices located throughout the country and each one is staffed with a knowledgeable team of marine loan specialists. 

Trident Funding does the hard work for you, so you don’t have to spend the time and energy to go through the hassle of contacting and comparing multiple lenders or banks. You also won’t have your credit pulled multiple times. Trident Funding will find the exact boat loan that is best for you, and we will make sure you’re happy with its rate and terms. 

We will walk you through the entire process from the time you apply until the time the boat is yours. We also assist with other details, like helping you get the best boat insurance rates, scheduling a marine survey, setting up any necessary inspections, and ensuring you meet Coast Guard requirements if necessary.

Are boat loans hard to get?

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 680, 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.

What impacts boat loan interest rates?

Boat interest rates are impacted by a number of factors including:

  • The borrower’s qualifications, especially their credit score. The higher the credit score, generally, the lower the interest rate. The less risky a deal, the better rate will be offered. And well qualified borrowers are considered to be less risky than borrowers with lower credit scores. 
  • Boat loan terms affect the rate. The length of the term may impact what rate is offered. 
  • The boat’s condition will affect the interest rate. For example, a new boat may get you a slightly lower rate than a used boat. 
  • The cost of the boat is also a determining factor in boat interest rates. A $50,000 boat may have a different rate than a $1.5 million yacht. Typically, more expensive boats have lower rates, but that’s not always the case. 
  • The economic market affects boat rates. Things like inflation, supply and demand, the stock market, government borrowing, and the Central Bank’s recent policy updates all affect interest rates for all industries including the marine industry.
  • The convertibility of the note affects the interest rate
  • Lender fees may affect boat loan rates because some lenders inflate the rate by adding in their fees. This isn’t the case with all lenders; others just charge a percentage or a flat fee upfront. 
  • World events, wars, and pandemics can also influence boat loan rates.

What is a good interest rate for a boat loan?

A good interest rate for a boat loan is changing all the time, but as of December 2022, boat interest rates for well qualified borrowers start around 6.37% and go up from there. So, any rate under 7% would be considered a good rate. Check out the free rate estimator to see what your approximate boat loan rates would be based on the year of the boat, if it’s new or used, the loan amount, and your credit score range. 

Keep in mind that the best boat interest rates are reserved for the most well qualified borrowers. A well qualified borrower will have an excellent credit score, a history of on-time payments, provable income, consistent employment history, and no recent bankruptcies or foreclosures.

What are the benefits of longer boat terms?

There are many benefits of longer boat terms including:

  • Less risk of default 
  • Less risk of negatively affecting your credit score because you’re not going to pay late or miss payments
  • Lower monthly boat loan payments
  • Lower monthly debt-to-income ratio
  • Makes the boat loan more affordable and attainable to more borrowers
  • Borrower can afford to finance a more expensive boat such as their dream yacht with a longer term 

Why does Trident Funding not offer boat loans for less than a 10-Year term?

Trident Funding doesn’t offer short-term boat loans. We know that those aren’t beneficial for our customers, and its goal is to find affordable financing for our customers so you can enjoy your boats and not be weighed down with payments you can’t really afford. We have built a solid reputation in the industry over the past 30 years based on integrity, transparency, and really treating each and every customer with respect and fairness. 

It doesn’t do the lender or the customer any good if the borrower can’t afford the monthly loan payment, and then the lender has to hire attorneys, and go through the process of repossessing the boat which is costly and time consuming for everyone involved. 

So, to try to avoid all of that, Trident offers boat loan terms for 10, 15 and even 20 years. These longer boat loan terms spread the cost of the boat out over a longer time period; meaning the monthly payments are lower and much more manageable. 

Let’s assume you’re buying that same nice cabin cruiser you have had your eye on for awhile. You meet all of the qualifications, put down 20% and want to finance the remaining $96,000. A realistic rate may be around 6.24% which means your monthly boat loan payment is around $1,077 assuming you have a 10-year term. Now, if you want even more time to pay, a 20-year term may be available, and now your payment will be around $701 per month. Either of these numbers are way more affordable than the outrageous payment associated with the 3-year term. 

Will boat loan rates go down?

As of December 2022, a competitive rate for a borrower with excellent credit on a $250,000 boat with a 20-year term could be 6.37%. A borrower with a lower credit score, but still a very good one, from 760-799 can expect a rate around 6.62% for the same loan amount and term. 

Rates have been on the rise over the past few months as the Fed has been trying to slow down inflation. It doesn’t seem like boat interest rates will go down in 2022, but they’re forecasted to moderate, and not go up much more. However, these are just predictions, and there are so many factors at play, that it’s hard to predict exactly what rates will do and when they will do it. 

If you’re thinking of holding off on financing a boat until rates drop, don’t count on it! And even if they do drop, the cost of the boat may have increased, there may be a waiting list for the model you want, or rates may surprise everyone and keep climbing. 

So, if you have your heart set on a boat, do your research today, use a boat loan calculator and a rate estimator, and then apply for a boat loan. Once you’re approved for the boat loan, you can lock in the rate, not lose out on your boat, and not have to risk rates rising or that loan program no longer being available. 

So, now that you know all about boat loan rates, terms, and what to expect when getting a boat loan, check out the industry leader: Trident Funding. They have nearly 30 years of marine financing experience. You can easily apply for boat loans with low interest rates on our website. Then expect smooth sailing as we help you through the entire financing process, all the way to the closing table.  

What should I expect my boat loan APR to be?

Boat loan APRs can vary depending on several factors. The APR is typically determined by your credit score, the size of your down payment, and the age of the boat, and the term of the loan. The higher the credit score, the larger the down payment, the new the boat, and the shorter term, the better the APR will be.

What is the difference between interest rate and APR?

An interest rate determines what you pay each month. It is the cost of the loan to the buyer and is expressed as a percentage. The APR is also expressed as a percentage but it gives you a broader view of the loan’s annual costs. The APR includes the total cost of the loan including loan origination fees, and points etc. APR stands for annual percentage rate. When comparing loan products, compare APRs with APRs and interest rates with interest rates so you’re getting a fair comparison. This can get confusing, so if you have questions on boat loan rates or boat loans in general, Trident’s trained loan specialists can help.