The Bottom Line

There are many financing options available regardless of the type of boat you want. Some lenders, such as SoFi and Upgrade fund loans quickly and allow you to take out unsecured personal loans to pay for your new boat. If you qualify, though, you could choose a secured loan with lower rates from lenders like Trident Funding and Patelco Credit Union. Shop around to find the best rates and terms. Your credit, the amount you borrow, the age and size of your boat, and how quickly you need the cash will determine which lender you choose.

Guide to Choosing the Best Boat Loan

Where to Get a Boat Loan

Boat loans can come from several sources: 

• Dealerships: Boat dealerships work with banks and credit unions to offer their customers financing on new and used boats. Some boat manufacturers and dealers may have special financing offers with attractive rates, but you're limited to certain makes and models. 
• Banks: Traditional banks often offer unsecured personal loans and secured recreational vehicle loans that you can use to purchase a boat. If you're a current customer with that bank, you may qualify for a higher loan amount or lower rates. 
• Credit unions: Like banks, credit unions may offer both unsecured and secured loan options. Credit unions tend to have lower rates and fees than other options, but you need to qualify for membership to apply for a loan. 
• Online lenders: Some financial technology companies and online lenders offer secured or unsecured loan options. They usually have quick applications and loan processing times, but they rarely provide in-person customer service. Instead, you have to contact customer support via email or phone. 
• Loan marketplaces: A loan marketplace isn't a lender; instead, it connects borrowers to a network of partner lenders. These platforms can make it easy to shop around for a loan, but the terms, rates, and fees vary between lenders, so it's important to carefully read the loan agreement before committing to the loan. 

Should You Apply for a Boat Loan?

Financing a boat can make sense in some circumstances. A boat loan allows you to take advantage of a good deal and get on the water more quickly, but you have to do your homework to ensure it's a financially savvy decision. According to Investopedia’s 2023 Personal Loan Borrower survey, major purchases such as boats are among the top three most common reasons cited for getting a personal loan.

Many people prioritize a low APR when getting a loan, but there are other factors to consider as well. Before applying for a boat loan, keep these factors in mind: 

• Purchase price: If you're new to boating, you may be surprised by the expense. Even used boats can cost well into six figures. 
• Depreciation: Boats are quickly depreciating assets, so a new boat is worth significantly less just one year after its purchase; if you take out a loan, you risk being "upside down" on the loan or dealing with negative equity. If your boat is totaled in an accident or sold and you owe more than it's worth, you could end up still making loan payments even though you no longer own it. 
• Interest: With rising interest rates, boat loans can have high annual percentage rates (APRs). Depending on your credit, the amount you're financing, and the lender you choose, boat loans can have double-digit APRs, and the accrued interest charges can cause you to pay much more than the boat's purchase price over time. 
• Fees: Fees vary by lender, but common boat loan fees include origination fees and late fees. Some lenders also charge prepayment penalties, so you'll have to pay an additional fee if you pay off your loan early. 
• Other boat costs: The purchase price of a boat is only the starting point of your total cost. Besides the purchase price, you also need to budget for a boat slip or storage space, maintenance, fuel, and insurance. 
• Other financial demands: A boat is a significant investment. If you take out a loan, you'll increase your debt-to-income ratio, which can make it difficult to qualify for other forms of credit. If you need to apply for a car loan or mortgage in the future, the existing boat loan may hurt your chances of qualifying for a loan. 

Alternatives to Boat Loans

Boat loans can have high interest rates and boats can depreciate significantly, so borrowing money to buy one may not be the best idea. Instead, consider these alternatives.

• Pay cash: While paying cash may not seem realistic, it can be a good idea to put off buying a boat—or looking for a more modest model—until you can cover the cost out of your savings. You'll avoid interest charges, lowering the overall cost. 
• Use a boat share app: There are boat share apps, such as and , that function like Airbnb for fishing and water sport enthusiasts. Through these apps, you can use a boat for a day, a week, or longer—with or without a captain on board—when it fits your schedule. You can enjoy the boat without having to take on the cost or responsibility for maintenance. 
• Participate in a fishing charter: If you want to go offshore fishing, joining a fishing charter can be a good idea. You can participate in a charter for a morning, a full day, or even a week-long vacation. Charters usually include groups of fishermen, so the cost is lower than privately renting a boat. 
• Join a boat club: If you plan on regularly using a boat, but aren't ready to purchase one yourself, a boat club can be a useful alternative. Boat club memberships give you access to the club's fleet of boats, and the membership fee may also include educational classes, member events, and insurance. Boat clubs typically involve an upfront fee, and then charge ongoing membership dues. Fees vary by location, club, and the type of boats available, but can range from $1,000 to $10,000 in upfront fees, and monthly membership dues can be hundreds. 

Comparing Boat Loans

When comparing lenders, pay attention to the following factors: 

• Collateral: Boat loans can be unsecured—issued solely based on your creditworthiness—or secured, with your boat serving as collateral. Secured loans tend to have lower rates, but the application process can take longer, and the lender may restrict the type and age of boat you can purchase. 
• Credit requirements: In general, you'll need good to excellent credit to qualify for a boat loan. There are some lenders, such as Southeast Financial, that will work with borrowers with lower credit scores, but they tend to have much higher rates. 
• Co-signer or co-borrower options: If your credit is less-than-perfect, some lenders will allow you to add a co-signer or co-borrower to your application. Adding a relative or friend with excellent credit can boost your chances of qualifying for a loan. However, a co-signer is responsible for the payments if you fall behind, and a co-borrower shares ownership of the loan, so it's a big favor to ask someone.  
• Restrictions on loan use: With some lenders, particularly those who issue secured boat loans, there are strict requirements for how the loan funds can be used. For example, the lender may only offer loans for certain types of boats, boats of a certain length, and boats younger than 10 years. 
• Rates: Rates and fees vary significantly between lenders, so it's wise to shop around to find the best options. 

How to Qualify for and Apply for a Boat Loan

Lenders want applicants to meet certain eligibility requirements before they apply for a loan. The following is a list of some of the most common factors that lenders consider. Keep in mind that some weigh certain factors heavier than others.

• Your age: Lenders cannot discriminate based on age. However, some states require that borrowers meet minimum age requirements before they can enter a legal financial contract with a financial lender.
• Legal residency: Just like age, lenders can't turn you down because of your national origin. They may ask you about your residency status to determine whether you can pay back the loan. Keep in mind that non-residents and non-citizens may still qualify, but it may be tougher to be approved.
• Income: Almost all lenders ask you for your income and employment information. This is to ensure that your source of income is enough to repay the loan. Some companies may have an income threshold before you can borrow.
• Debt-to-income (DTI) ratio: This ratio represents how much of your income goes to pay off your debts every month. As such, it helps lenders see how much of a risk you are if they approve you for a loan.
• Credit history and score: The majority of lenders use your credit history and credit score to qualify you for a loan. Although these factors don't make or break the decision, they may also influence your loan terms, amount, and interest rate.

To qualify for and apply for a boat loan, follow these steps: 

1. Decide on a budget. Sit down and review your expenses, income, and other financial goals. Calculate how much of your monthly cash flow you have left over that you can allocate towards the purchase and maintenance of a boat. Be sure to account for ongoing expenses, such as repairs, fuel, and marina fees—and not just the purchase price.
2. Choose a boat type. Think about what you'd like to do with the boat. If you'd love to have leisurely afternoons with family and friends at a nearby lake, a pontoon boat could be an excellent choice. Or if you have your heart set on shark fishing, a larger and more expensive center console offshore fishing boat will be needed. 
3. Consider new or used. Boats can depreciate a great deal, so a used boat may be a better choice than a new boat. However, new boats have the latest features and are often backed by warranties, so some people will feel greater peace of mind buying new. What makes the most sense depends on your budget and your comfort level with the different purchase prices. 
4. Save for a down payment. If you are planning on taking out a secured boat loan, you'll likely need a down payment. Down payment requirements vary, but they can range from about 10% to 30% of the boat's purchase price. However, if you're buying a less expensive boat, such as one that costs less than $100,000, you may be eligible for an unsecured loan with no down payment requirement. 
5. Shop around. Request quotes from several lenders to find the best rates and repayment options for your budget. Many lenders allow you to view your loan options with a soft credit check, which doesn't affect your credit. 
6. Complete a loan application. To apply for a loan, you’ll need to provide information about yourself and the boat you want to buy, including your name, address, and Social Security number.

Depending on the type of loan you're applying for and the lender, you could receive a decision within minutes. With unsecured loans, the funds are disbursed directly to your bank account, and you can purchase a boat from a dealership or private seller. With secured loans, the lender typically pays the dealership on your behalf. 

Why You Should Trust Us

Investopedia collected and analyzed hundreds of key data points from over 70 companies across three months to identify the most important factors for readers choosing a fair loan lending company.

We used this data to review each company for fees, repayment terms, income requirements, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best loans for those with fair credit since 2020.

How We Pick the Best Boat Loans

To evaluate and rank personal loan providers we collected hundreds of data points across 70 lenders, including traditional banks, credit unions, fintechs, and special interest finance companies. We researched and evaluated APRs, loan amounts and terms, fees, customer experience, and much more.

To rank the lenders in our database and to generate star ratings, we weighted the data we collected, based in part on what consumers told us were the most important features of a personal loan and lender in a survey we conducted. We grouped those factors into four broad areas:

• Loan costs (advertised APR, fees, and six other factors): 29.25%
• Loan terms (loan amount, repayment term, and three other factors): 22.25%
• Borrowing requirements (credit score, membership requirement, and six other factors): 28.5%
• Additional features (online application, pre-qualification, and eight other factors): 20%

Learn more about how we evaluated personal loans in our complete methodology.

Guide to Personal Loans

Learn more about personal loans:

• What is a personal loan?
• How do personal loans work?
• When are personal loans a good idea?
• How to get a personal loan
• How to apply for a personal loan
• How to use a personal loan
• Where to get a personal loan
• Personal loans vs credit cards
• Alternatives to personal loans
• Personal loan calculator
• Personal loans methodology