Boat Loan Rates Financing a Boat Purchase

Buying a boat is a big investment, and most buyers require the assistance of a boat loan to ease into a boat purchase. Available for both new and used boats, boat loans can help reduce initial cash outlay and spread the expense of a boat over affordable monthly payments. 

With boat loan rates typically comparable to mortgage interest rates, financing a boat purchase can help boaters move up to a larger boat or get into boating for the first time. In order to get the best rates, buyers should be aware of the many factors that can influence lender rates when purchasing a boat. Making adjustments to loan criteria such as the total amount, down payment amount or term can help reduce boat loan rates one percentage point in interest, or more.

Factors that Influence Boat Loan Rates

There are many factors and variables that can impact a buyer’s ability to attain the best possible boat loan rates when financing a boat. These factors will greatly influence available rates from a lender and range from buyer finances to boat condition.  

Some of the variables in boat loan rates and lender requirements include:  

1. Geographic area – boat loan rates tend to vary by state, region or country
2. Buyer credit scores – with any loan, lenders favor high credit scores for lower rates
3. Buyer debt to income ratio – lenders prefer low debt and high income when awarding the best boat loan rates
4. Buyer’s cash liquidity – a buyer with more available cash assets will be less risky for boat loans
5. Amount of down payment – a down payment of 10% is typically the minimum amount required, but a higher down payment of 20% will help get lower boat loan rates
6. Amount of boat loan – boat loan amounts over $100,000 can typically get lower rates and longer terms, but lenders require and require the boat
7. Boat loan term length – boat loan rates are typically lower for 15 or 20 year loans
8. Age of boat – lenders may require shorter term lengths and lower loan amounts on older boats for good boat loan rates
9. Condition of boat – a survey or appraisal may be required by lenders to determine the condition of the boat for financing

Getting the Best Boat Loan Rates

There are many boat financing loan sources to consider when applying for a loan. Boaters should seek out banks or lenders that are members of The National Marine Banker’s Association (NMBA) for financing. NMBA marine lenders are familiar with the process of purchasing a boat and can typically offer the best possible boat loan rates. Some marine lenders also offer refinancing of an existing boat loan with a lower rate. 

New boat purchases should expect to put down a 20% down payment in order to get the best possible boat loan rates. A higher down payment also helps to prevent the boat’s future resale value from being lower than the amount owed on a boat loan. Many marine lenders will set the required loan term based on the age and condition of the boat. With a willingness to have flexibility in term length, down payment and loan amount, boat buyers will be more likely to attain the best boat loan rates available on the market.

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Sources: 

1. National Marine Banker’s Association
2. BoatUS.com

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