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A Comprehensive Guide to Boat Loans, Financing, Interest Rates

By: Mary Strauss | Date: January 4, 2019

Is there anything better than the anticipation of arriving at your slip, where your magnificent boat awaits, ready to take on the open waters? The only thing better than that is knowing that this yacht, this memory-making machine, is well financed and belongs to you. We can’t make the wind blow through your hair, but we can give you the info you need to understand boat loans before buying a boat.

It’s easier than you think and if you have any experience purchasing a car then you are almost all set. The best part about buying a boat is that the boat community itself is welcoming, friendly and inclusive. Boat talk is the best talk.

With that in mind, we want to discuss the first steps you have to take to buy a boat. This is a comprehensive guide for boat loans, financing, interesting rates, terms, and fees.

How to Start the Boat Loan Process

Start collecting all the relevant information.

Boat loans are similar to car loans and mortgages. You have to shop around for a financial institution that is offering the best boat loan terms. All major banks provide loans for boats and most will require the buyer to provide certain information to validate their financial stability. This includes:

Personal tax returns for the past 2 years
Proof of assets including all liquid assets
Credit score which will be run by the lender
Income statements including statements for self-employed applicants

Before boat financing can begin, the lender will discuss the loan‐to‐value guideline that is based on book value for used boats and the contract price for new boats.

Keep in mind that the requirements for boat loans are more stringent than vehicle loans. Consider getting pre-approved for a boat loan before you even start shopping for a boat.

How to Calculate the Value of You Boat

If you are pre-approved for a boat loan, you can shop for a new or used boat that fits your budget. These are the steps you should take to calculate the price of boats you want to buy:

Check the Boat Trader Price Checker

Use the Boat Trader Price Checker tool to estimate the “blue book” value of the boat you are considering. That should give you a benchmark too use in all your boat shopping and research.

Understand the market

Get to know the market buy searching for yachts for sale. Search by model, brand, size, and condition. The best way to determine market value is to get to know the market.

Consider Condition

Condition is a three-factored approach: you must consider the mechanical, cosmetic, and electronic condition.

Boat Surveyors

If you found a boat you like, consider contracting the services of a boat surveyor. For larger yachts or even new yachts for sale, you want to consider the services of a yacht surveyor to ensure that the correct value is represented for tax purposes.

Boat Loan Rates

Standard boat loan interest rates are currently around 4% to 7%.

Boat loan interest rates are determined mainly by your credit rating, along with the loan term. Generally, the longer the repayment term is, the higher the rate can be. That being said, the more you borrow, the lower your interest rate may be as well since you’ll have more to repay. You can use our Financing Calculator to estimate what your boat payments might be

Working with a Yacht Broker

If you are ready to start looking for a new yacht or you’re shopping for a boat, reach out to a yacht broker who can walk you through the entire process, trouble free. Working with a yacht broker is the carefree way to purchase a boat.

For instance, Galati Yacht Sales works directly with lending institutions to ensure that we get the best yacht loan interest rates possible. Our long-standing relationship with these institutions gives us the leverage needed to negotiate on behalf of our customers and yacht buyers.

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