Buying a boat can be an expensive venture, whether you’re purchasing a brand new boat or one that has belonged to someone else previously. While new boats can cost tens of thousands, hundreds of thousands, and even millions of dollars, the fact is that used boats can often cost just as much. If you’re ready to buy a pre-owned boat, learn how we do boat loans at Trident Funding.

For this reason, many buyers will find themselves looking at options to finance the purchase of their new boat. But can you get a loan for a used boat, as well? And if so, how does that differ from getting a new boat loan? Here’s everything you need to know.

Can I Get a Loan for a Used Boat?

First and foremost: yes, you can absolutely get a used boat loan. Loans for used boats are offered by a variety of marine lenders and may give you access to financing whether you’re buying a lightly used bass boat or a 15-year-old yacht.

You’ll find that the requirements for used boat loans may be a bit more stringent than for new boats. For instance, you may be limited to boats of a certain age; at Trident Funding, you can shop around and get a competitive used boat loan as long as the boat you’re hoping to buy is 20 years-old or newer.

Most lenders will have general boat loan requirements, as well, regardless of whether you’re buying new or used. These limitations involve:

  • The boat type
  • The purchase price
  • Its length
  • Its location
  • The boat’s age
  • Its value
  • How much you’re able to put down on the purchase
  • Your credit history

When shopping for a used boat loan, you may come across different down payment or loan limit requirements with certain lenders, especially compared to new boat loans. Depending on the boat’s type, value, and even age, you might be required to put more down on the purchase, for example. 

How a Used Boat Loan Differs from a New Boat Loan

Any time a lender offers a loan — whether on a home, car, boat, or other asset — they want to be sure that they are limiting the risk they take on. This is especially true if you’re taking out a loan to purchase a used asset, such as a pre-owned boat. That’s because an older boat has more wear and tear than a new one, and may be at a higher risk of loss or damage. 

Because of this, the loan offers available to you when buying a used boat can look a bit different than those you’d get with a brand new boat. This is especially true when you begin shopping for the best possible loan rates and applying for boat loans. If you’re financing a used boat purchase, you may be offered a higher interest rate (expressed as annual percentage rate, or APR) on your new loan than if you were buying a new boat. 

While it’s not always the case, a used boat may also cost less than a new one straight off the showroom floor. Marine lenders generally offer different rates depending on the total boat loan amount, so an older and more affordable boat could also result in a lower used boat loan rate than a new boat with a large price tag.

How to Get a Loan for a Used Boat

So, how do you go about getting a loan for used boats? It’s pretty simple.

Find a lender that offers used boat loans.

The first step is to find a lender that offers loan on pre-owned boats. Thankfully, there are quite a few of them — many of which are trusted lending partners with Trident Funding — so you shouldn’t have to look too far.

Next, you’ll need to gather all of the specifics about the boat you’re wanting to buy, so that you can begin shopping for the best rate and applying for your new loan. You’ll want to know the boat’s:

  • Model year
  • Price 
  • Type (sail or power)
  • Manufacturer
  • Model
  • Engine manufacturer
  • Horsepower
  • Engine count
  • Fuel type (gas or diesel)
  • Trailerability

While you can apply for a boat loan without having a specific boat in mind, you won’t get your final credit decision and used boat loan rate until your lender knows exactly which boat it will hold as collateral. However, you can still begin the application process and get an idea of the used boat loan options available to you, even if you haven’t yet made up your mind.

Determine the lender’s accepted criteria for a used boat loan

Before choosing to apply for a loan on a used boat, you should first do some research on what a specific lender will allow. That’s because many lenders set limits regarding the types of boats they’ll offer loans on, how old a boat can be to qualify for a used boat loan, and how much your boat can cost. 

You’ll also want to consider the lender’s requirements in regards to the down payment, borrower credit score minimums, and even your location. Not all lenders are going to be the right fit for you and your specific situation, even if they do offer loans on pre-owned boat. For example, when you work with Trident Funding, you will typically need a credit score of at least 600 to get approved for a boat loan.

This doesn’t have to be too tricky, though. When you apply for a used boat loan through Trident Funding, our experienced team of financial professionals will analyze your unique situation. We will help connect your boat loan needs with a lender that fits the bill, picking from our extensive network of trusted lenders.

How to Get the Best Used Boat Loan

The better your boat loan terms, the less you’ll pay in total for your purchase. And who doesn’t like to keep a little more of their money in their own pocket?

But how exactly can you ensure that you’re getting the best possible used boat loan rates and terms?

1. Buy a boat that isn’t too old

When it comes to used boat lenders, most will have a maximum boat age they’re willing to lend out money for. (With Trident Funding, this limit is 20 years.) If you’re looking to buy a boat older than that, you may have trouble finding the right lender or affordable terms. 

2. Limit your purchase price

Boat loan rates often hinge on factors such as the overall purchase price and loan amount. Not only does your borrowed amount need to fall within the lender’s allowed loan limits, but taking out a big loan can sometimes mean a higher interest rate than would be offered on a smaller loan.

Plus, the larger your loan, the more you’ll likely need to cover as a down payment and the higher your monthly payment will be. Spend some time checking out a used boat loan calculator to be sure that the boat you choose is affordable for your situation.

3. Make sure your credit is in a good place

The best loan terms and rates are reserved for the most creditworthy borrowers. If you have a low credit score or negative credit history, you’ll have a hard time getting a boat loan at all. Even if you are approved, expect that you won’t be offered the lowest possible interest rates. 

It can be helpful to check your credit report before you even start applying for your boat loan. This allows you to identify and correct any errors that might exist, as well as go into the application process with an idea of where your credit score stands. If you have a high credit utilization or negative reports that will age off soon, you might want to wait before taking out a loan or check out some tips to raise your credit score.

4. Add a co-borrower if needed

Even if you can qualify for a used boat loan on your own, adding a creditworthy co-signer can be one way to snag even better loan terms. Just make sure that the co-borrower understands their legal obligation to the debt!

5. Be willing to adjust your repayment terms

There is a sweet spot that exists where you’re able to find a loan that limits your interest charges but also gives you a monthly payment you can live with. A longer loan term might reduce your monthly payments, but it often raises your interest rate. A short loan term might qualify for a lender’s best possible rates, but you’ll have a hefty monthly obligation.

Check out that loan calculator above to figure out what you can afford and what sort of loan term you need to make your used boat purchase work.

6. Shop around for the right lender

Arguably the most important step, you’ll want to shop around a bit before choosing your used boat lender. This can even just mean applying through an aggregator like Trident Funding, which works to connect you with the right lender from a network of options.

By shopping around, you can sleep soundly knowing that you got the best possible loan terms including a lower interest rate, no (or low) fees, and the right monthly payment to fit your personal budget. 

Can I Get a Loan Using My Boat Title?

Any time you have a loan on a tangible asset such as a boat or a car, your lender acts as the first lienholder. This means that the lender technically retains ownership of your asset (in this case, your used boat) until the loan is entirely paid off. At that time, they will release the boat’s title to you, and you officially own the boat. If you default on your loan, the lender has the right to seize the boat as collateral for the debt.

But what if you already own your boat free and clear, and what to take out a loan against it? You might be wondering, “Can I use my boat as collateral for a loan?”

Similar to car title loans, there are lenders that will offer loans against the title of your boat. As you might expect, these are called boat title loans.

With a boat title loan, you are taking out a secured loan against the current market value of your boat. In exchange for this loan — which is usually limited to about 40% to 60% of your boat’s value — you will hand over the title to the boat.

If you pay off your boat title loan as agreed, including applicable interest charges, the lender will return the title to you and your boat will remain in your possession. However, if you do not repay the debt accordingly, the boat title lender can seize the secured collateral (your boat) to cover the debt. They may then sell the boat to recoup their losses.

Bottom Line

Buying a used boat can be a great way to get a deal on a pre-owned boat, but there are some things to keep in mind about used boat loans. Your rates may be higher than with new boats and you might find that lenders have certain limits in place when you aren’t buying a new model year.