Financing Your Boat

Financing is a crucial step in planning and organisation. Hence, one cannot override it. Many people desire ownership of a boat or ship, but the expensive cost of getting it makes it all hard. Little wonder, most people prefer rentals to actual purchases. Nonetheless, rentals do not guarantee a life possession of the yacht in which financing does.

Boat Financing is a service rendered for persons short of capacity to purchase a boat. It could be in the form of credit financing or a loan. We do not offer boat financing. However, we have a wide range of third-party lenders that are available to help you. You can contact them to get started.

Everything you need to know about boat financing is provided here.

How to Finance A Boat

First, you need to determine the boat you wish to buy and estimate the costs. Kindly refer to our sales, stock, and charter designs page. To finance a boat, you may take either of the following steps.

Credit Financing

This process involves an agreement between the buyer and the dealer. They spell out terms and conditions expressly for a seamless contract. For instance, the dealer may allow instalment payment or hire purchase on the other hand.

Also, there is what is known as a trade-in. Trade-in involves the exchange of boats, and in most cases, the used boats are undervalued compared to the price of the new ship. In this case, the buyer must add the remaining value in cash and may pay in instalments.

Bank Loans

On the other hand, you may request a loan at your bank based on agreed terms and conditions issued by the bank. The loan is advanced for a period and repaid at intervals, usually monthly.

Borrowing Institutions

Other than banks, credit facilities lend money to the public with interests placed on it. As a production company, we can accept payment in the form of instalments. However, terms and conditions often apply. Credit financing is the easiest of all because it requires little or no paperwork or legal issues.

Marine Lending Specialists

MLS are financial institutions that offer services as a broker. They connect borrowers with lenders and also secure finding through external means. They are also shortly known as Marine lenders, and loans taken from them are no different from personal in terms of boat loan interest rates and repayment.

Requirements for Boat Financing

A boat loan is almost the same as a car loan. Hence, it often involves the same steps and factors.

The standard requirements are credit rating, debt to income ratio, income stability, and net worth.

Credit Rating

It refers to the capacity of an individual to repay a loan based on previous experience. For some loans, there is a benchmark figure serving as a requirement. For instance, a 700 rating may be considered too high, while many people may pass the 600 cut-offs. More Information

Debt to Income Ratio

This requirement is similar to credit rating, but this deals with the present status of the individual. An individual’s income is revised to determine his or her capacity to repay the loan.

Income Stability

The stability of a person’s income is also checked. That is, how often the person receives payment.

Net Worth

It also examines the ability of a person to return a loan. It is usually a requirement when a vast amount of money is involved.

You may be asked for different files and documents such as financial statements, verification of employment, passports, identity cards, etc.

Modern Boat Financing Options

It was a bad idea to borrow a loan to acquire anything other than necessaries in the olden days. This attitude was mostly to the high-interest rate and short repayment period involved. However, that is not the case in modern days.

Loans are now advanced for convenience sake other than profiteering. For instance, the repayment duration may extend up to ten or twenty years, and the interest is low. Some credit facilities do not support interest rates and therefore charge none.

Secured vs. Unsecured Boat loans

Secured boat loans are monies advanced with the help of collateral. Usually, loan terms depend on the period of repayment, the lender, size of the loan, credit rating or income, and whether the loan advanced is supported by a secured loan.

For secured loans, the advantages are that the repayment duration may be longer, or the rate may be lower, or it may be that the loan limit is increased. The collateral differs, but in most cases, the boat is used as one, and default may lead to such a vessel’s claim. Sometimes, a down payment may be a compulsory requirement. Overall, this type of loan is best for those who can’t access an unsecured loan.

On the other hand, an unsecured loan is the complete opposite of a secured loan. In this case, the boat or any other object is not used as collateral, nor is there any need for a down payment. The only disadvantage attached to unsecured loans is that the loan limit may be restricted, or the repayment term may be shorter, or that the interest rate is high.

Nonetheless, a default does not automatically mean a claim or lien on the purchased boat. However, there may be other consequences, such as penalties and fines. Usually, the repayment term is no longer than seven years, and the interest rate is between 6% to 36%.

Alternative Means of Purchasing A Boat

Despite improvements to the various financing options, you may believe that borrowing may not be a wise choice for you. Or maybe you have been declined loan offers. The following are alternative means of taking a boat loan.


You should activate a saving plan and save up to buy your desired boat. Sometimes, as time passes, a ship’s cost reduces and gets it at a lower price.

Join a Boat Club

Boat clubs have access to fleets of boats and also hire the same to their members and visitors.


Rentals offer you temporary possession of the boat.


How often should I repay a loan?

It may depend on the agreed terms between you and the lender. However, the most convenient timeframe should be monthly.

What are the miscellaneous costs to boat ownership?

Apart from the boat’s actual price, expenses cover insurance, registration and licenses, storage, maintenance, and fuel. The costs can only be estimated but not accurately calculated because it depreciates over time.