Tips For Getting Approved For A Boat Loan


There’s a saying: “The two happiest days in a boat owner’s life are the day they buy it and the day they sell it.” Buying a new or used boat is expensive. To help make it more affordable, many lenders offer boat financing.

To apply for a boat loan, you’ll need to provide the lender with some information, including your credit score and income. The requirements vary by lender.

1. Have a Good Credit Score

Financing a boat is similar to financing a personal or auto loan, but there are some additional factors. The lender will typically check your credit (a hard inquiry that may ding your score slightly) and consider your employment information, assets, debts, and income to determine whether or not you qualify for the loan.

The lender will also consider the type of boat you want to buy and its age. Some lenders do not finance boats older than a certain year and may require you to make a larger down payment in order to get approved for the loan.

Rate shopping is important with boat loans, as the interest rates can vary significantly amongst lenders. To find the best rates, look at each lender’s terms and conditions to see which one offers the lowest APR for your needs. It’s also a good idea to compare term limits and loan amounts. These will help you ensure that the size of the loan and monthly payments fit your budget.

2. Have a Down Payment

While it may be tempting to jump on a boat loan when you find the right one, it’s important to make sure your finances are in good shape before applying. This includes knowing how much of a down payment you want to make (if any) and insurance requirements that lenders have, as well as your debt-to-income ratio.

Generally, bigger boat loans require larger down payments and have longer repayment terms than smaller ones. That’s because a lender has to protect their investment by having a security interest in the vessel itself.

You should also compare interest rates among lenders to see what’s available. But be sure to look at the annual percentage rate, which takes into account both interest and loan fees to give a more apples-to-apples comparison between lenders. And don’t forget to factor in ownership costs such as gas, insurance and maintenance into your overall boat budget. Those can add up quickly.

3. Have a Good Income

When applying for a boat loan, lenders will take your credit score, debt-to-income ratio and income into consideration. It’s important that you can demonstrate that you have sufficient income to afford the monthly payments on your loan.

Many lenders offer different terms and interest rates on boat loans. It’s a good idea to shop around and compare offers from multiple lenders to find the best option for you.

Some lenders may also require a downpayment on a boat purchase. If this is the case, make sure you have enough money saved up to cover this amount.

If you’re looking for a lender that offers boat loans Texas, check out the available options at your local bank or credit union. You can also look for online lenders that offer specialized financing for boats. These types of lenders may be able to offer better terms and lower interest rates than traditional banks or credit unions.

4. Have Liquid Assets

Typically, lenders want to see that you have enough liquid assets on hand to cover the amount of your boat loan in the event of an emergency. Liquid assets may include savings, checking accounts or investments. Additionally, having a lower debt-to-income ratio can help you get approved for a boat loan, especially if you have a high front-end DTI and other debt factors are keeping you from being approved.

You can shop online to find the best rates and terms for a boat loan. Look for lenders that offer a pre qualification feature, which will show you the terms you may qualify for without impacting your credit score.

Another option is to work with a boat dealership, which can arrange financing similar to how car dealers do. Most dealers will have a finance manager on site who can assist you with the process and offer advice about interest rates. They can also give you tips on locating the right boat for your needs.

Abel Eino
the authorAbel Eino