How to Apply for a Boat Loan? An In-Depth Manual

Whether you’re a seasoned sailor or a first-time boat buyer, understanding the ins and outs of how to apply for a boat loan is essential to securing the best financing for your vessel.
How to Apply for a Boat Loan? An In-Depth Manual
Do you dream of setting sail on the open waters with your boat? A boat loan can be your ticket to making that dream a reality. Let’s explore how to apply for a boat loan.
In this article

In the US, it’s common to use a boat or RV. Americans enjoy their summers doing several water activities. The age group of people using boats varies from 45 to 54, as per the National Marine Lenders Association (NMLA). The number of people who use boats in America can vary significantly depending on the type of boat (e.g., recreational boats, fishing boats, commercial vessels), geographical region, economic conditions, and recreational trends. This expert guide will explore how to apply for a boat loan, their pros and cons, and how to calculate boat loan payments.

What is a Boat Loan?

A boat loan is a type of financing that allows individuals to purchase a boat without paying the total cost upfront. It is a specific loan product designed to help individuals, whether seasoned boaters or first-time buyers, acquire a boat of their choice. With a boat loan, borrowers can get money from a lender to cover the cost of the boat and then repay the borrowed amount, along with interest, over a predetermined period.

Since May 2021, boat loans have peaked in inquiries regarding interest rates and varied from then to now. Here are some changes in the boat loan inquiries.

PeriodBoat loan inquiries change
May 2021 to May 2022-27%
May 2022 to May 202335.6%
May 2021 to May 2023-1%

Boat Loans: Pros and Cons


  1. Fulfill Your Boating Dreams: A boat loan allows you to own a boat without paying the total cost upfront, making boating more accessible to enthusiasts.
  2. Competitive Interest Rates: Boat loan interest rates are often competitive, especially for buyers with good credit scores.
  3. Flexible Repayment Terms: Lenders offer various loan terms, allowing you to choose a repayment schedule that suits your financial situation.
  4. Potential Tax Benefits: In some cases, the interest on boat loans may be tax-deductible, potentially reducing your tax burden.
  5. Build Credit: Responsible repayment of a boat loan can positively impact your credit score, improving your overall creditworthiness.


  1. Down Payment Requirement: Boat loans often require a down payment, which can be a significant initial expense for buyers.
  2. Depreciation: Like any vehicle, boats can depreciate over time, potentially leaving you with negative equity if the boat’s value decreases faster than your loan balance.
  3. Potential for Hidden Costs: Boat ownership comes with maintenance, insurance, storage costs, and loan payments.
  4. Collateral Requirement: Many boat loans are secured by the vessel itself, which puts your boat at risk of repossession if you default on payments.
  5. Limited Financing for Older Boats: Some lenders may have restrictions on financing older boats due to higher depreciation risks.

Also Know About: RV Financing: How to Get the Best Loan Rates?

How to Apply for a Boat Loan

These are a few steps you can follow when researching how to apply for a boat loan.

  • Determine Your Budget: Calculate how much you can afford, considering the boat’s price, down payment, and other expenses.
  • Check Your Credit: Review your credit report, monitor your credit score, and improve it if necessary to secure better loan terms.
  • Research Lenders: Compare boat loan rates and terms from different lenders to find the most favorable option.
  • Gather Documentation: Prepare necessary documents, such as proof of income, identification, and boat details.
  • Submit the Application: Complete the lender’s application process, providing accurate information and supporting documents.
  • Review the Offer: Once approved, carefully review the loan offer, including interest rates, terms, and associated fees.
  • Close the Deal: Sign the loan agreement and complete any remaining paperwork to finalize the loan.

Try Beem’s personal loan feature to get all the information you need on personalized rates and explore loan options ranging from $500 to $100,000, without impacting your credit score!

how to apply for a boat loan
How to Apply for a Boat Loan? An In-Depth Manual 2

How to Calculate Boat Loan Payment

Calculating the boat loan payment involves considering several key factors that impact the monthly installment. Here’s what you need to consider:

  1. Loan Amount: Determine the total cost of the boat, subtract any down payment you’re making, and that will give you the loan amount. The more significant the loan amount, the higher the monthly payment.
  2. Interest Rate: The interest rate, expressed as an annual percentage rate (APR), directly affects the loan’s cost. A higher interest rate means higher monthly payments.
  3. Loan Term: The duration of the loan, typically measured in months, affects the number of payments you need to make. Longer loan terms result in lower monthly payments but may lead to higher overall interest costs.
  4. Down Payment: The higher the down payment, the smaller the loan amount, which can reduce your monthly payment.
  5. Additional Fees: Consider any loan origination fees, processing charges, or other costs associated with the loan, as they can impact the total amount financed and, consequently, the monthly payment.
  6. Interest Type: Determine whether the loan has a fixed or variable interest rate. With a fixed rate, the monthly payment remains constant throughout the loan term. In contrast, a variable rate may fluctuate, leading to changes in monthly payments.
  7. Loan Structure: Some loans may offer balloon payments or other unique payment structures, which can affect the monthly payment amount.
  8. Prepayment Penalties: Check if there are any penalties for early loan repayment. Paying off the loan early could save you money on interest.
  9. Amortization Schedule: Understand the loan’s amortization schedule, which outlines how much of each payment goes towards the principal (loan amount) and how much goes towards interest.
  10. Insurance and Taxes: Remember to account for insurance and tax costs related to the boat, as they may not be included in the loan but will be part of your overall boat expenses.

By carefully considering these factors when looking into how to apply for a boat loan, you can estimate your boat loan payment without using a specific formula. Remember that the monthly payment may vary slightly due to rounding and specific lender practices.

You can use BFF – The Better Financial Feed on Beem to plan and protect your money like an expert with on-point financial insight and recommendations. 

Also know about: Tax Benefits for summer expenses


A boat loan can be an excellent solution to embark on boating adventures. While exploring how to apply for a boat loan, carefully considering the pros and cons and meticulous planning can help you secure a boat loan that aligns with your financial goals. Before setting sail, calculate your monthly payment to ensure a smooth and enjoyable boating experience.

Beem’s personal loan feature can help you zero in on the kind of loan that suits your requirements best and helps you sail through a financial crunch.


1. Can I Get a Boat Loan With Bad Credit?

Some lenders offer boat loans to individuals with less-than-perfect credit, but the terms may be less favorable. Improving your credit score beforehand can increase your chances of securing a better loan offer.

2. What Type of Boats Can I Finance With a Boat Loan?

Boat loans typically cover various watercraft, including sailboats, fishing boats, yachts, and personal watercraft like jet skis. However, each lender may have specific restrictions on the types and ages of boats they finance. Read more about this when you explore how to apply for a boat loan.

3. Can I Refinance My Boat Loan?

Boat loan refinancing is possible, especially if you find better loan terms or your financial situation improves. Be sure to consider any fees or penalties associated with refinancing before deciding.

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Team Beem

Team Beem

Team Beem brings you the latest in the world of personal finance to you. From tips and tricks on how to manage money to how to get cash for emergencies, Beem is your destination for all the information you need to be smart about your money.


This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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