How Long Can You Finance A Boat?

Boat Financing

Boat Loans refer to any type of personal loans which are used for financing the purchase of a boat or any other marine craft. They function in a very similar way to personal loans and auto loans. These forms of installment plans also come with a form of repayment term, which are essentially fixed payments that are to be done monthly or in the form of fixed variable rates. 

Keep reading till the end of the article to find out more information about “how long can you finance a boat”!

How Does Boat Financing Work?

Boat Financing
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A Boat Loan works in a very similar fashion to a car loan. The lenders here are generally offered fixed rates of loans for a period of 10-15 years. The rates of Boat financing and its terms vary a lot amongst the different lenders. Where the lowest rates are typically reserved for getting a higher term length and credit score – based on the amount of loan. 

There are a wide variety of loans, lenders and terms of loans which are available at a person’s disposal. 

Factors Which Affect The Financing Of A Boat

Boat Financing
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There are a lot of factors that the lender might take into consideration when determining the tenure of the financing of a boat. Here is a list of some of the three important factors which affect the financing of a boat.

Type Of The Boat

A majority of the powerboats can be grouped, but also there are a few outliers which the different financers treat differently.

Boats which have wooden hulls, for instance, or even boats which have high performance are treated differently. There are also a lot of lenders out there who differentiate between powerboats and sailboats in general. There are even financers who consider pontoon boats and multi-hull boats a lot differently. 

There’s also another great issue that arises and that is with the liveaboards. This is all because the set laws regarding the various residences and home ownership are all treated differently than those of common boat loans. 

Tip: There are a lot of Boat Loan Calculators available out there that you can make use of for calculating the monthly payable amount for the financing of a boat.

Size Of Boat Loan

The loan size of a Boat is also a very crucial aspect when considering the duration for how long a lender is going to stretch a loan for. As a general rule, the bigger a loan is, the longer it can be financed. There are a lot of vendors who set a minimum amount of loans for specified term periods. 

Keep reading just a bit more to find out the answer to “How long can you finance a boat for”!

The Boat’s Age (Applicable For Used Boats)

This factor only applies to the used boats. The age of a boat also has a huge impact on the length of the term which is originally acceptable to the various lenders. 

For the majority of the cases, the newer the boat is the longer duration you can get the boat for. 

There are also a lot of vendors out there who put a cap on the “age of a boat” for setting up considerations when making loans. There are also such lenders out there who only make deals on purely new and unused boats.

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For How Long Can They Be Financed?

Boat Financing
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The term and details for financing of a boat (new/used) are very alike. On average, the length of boat loans range from about ten to fifteen years. 

As a general practice, the average loan term for boats is about 10-15 years. For the more shorter terms, a minimum of 5-10 years have lower rates of interest but higher monthly payments. For longer terms, 15-20 years tenure has higher paid interest in total. But at the same time, they also have a lower monthly payment. 

Here is a list of some of the more popular categories according to which the loan terms may vary:

Used Boats

Ever wondered for how long can you finance a used boat? Well, these are usually financed for ten years or even less. This happens due to a faster depreciation. 

New Boats

The newer boats are frequently financed for up to twenty years – and this is especially applicable for the boats that are higher-priced.

Frequently Asked Questions (FAQs):

Here is a list of some of the more popularly asked questions regarding this topic:

Q. What Is A Good Interest Rate For A Boat Loan?

A: Boat Loan rates usually vary a lot according to the different lenders but generally they start at around 7% for borrowers who particularly have an excellent credit.
Prequalification for boat loans from the various lenders is going to provide a positive insight on whether or not a lender is offering competitive rates. 

Q. Is There Any Possibility Of Getting A 30-Year Loan On A Boat?

A: No, this is something that is absolutely not possible when applying for financing of a boat. The maximum period of loan that one is eligible for is twenty years. 

Q. Is Getting a Boat Loan A Hard Process?

A: Yes, to an extent getting a boat approved is harder. This is generally because boats tend to be more expensive and this makes meeting the income-to-debt ratio of any lender much more difficult. 

Q. Should I Take Out Home Equity For Getting A Boat Loan?

A: If you happen to have a substantial amount of equity at your home then you can get an equity loan with even a low rate. 
You also need to keep in mind that home equity loans frequently include very expensive costs of closing and the home gets put at risk (by default). 

To Wrap It Up!

Boat Financing
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After you are done with the due diligence and determining the boat loan that you want to get, you can get started with applying. Make sure you research the boat, before making the decision of purchasing it.

Thank you for reading this article up till here. I hope you found the information regarding “how long can you finance a boat” useful. 

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