In 2020, US boat sales reached an all-time high and only continued to increase through 2021. For many people, they didn’t have the cash available to pay for the boat out of pocket. In this situation, they financed their new boat purchase. 

If you’re interested in buying a boat, you may need to consider boat financing. 

1. Start With Your Credit 

As with anything finance-related, you need to start with a credit check. The lender is going to run your credit when you are financing a boat, so you don’t want there to be any surprises. The better your credit score and report are, the better boat financing rates you will secure. 

Running your credit report lets you check for inaccuracies and make any necessary corrections that could hurt your score. You can also take steps to improve your score. 

2. Plan to Pay a Down Payment 

Similar to buying a house, lenders typically want you to pay a down payment towards the total boat cost. The larger your down payment is, the less you have to borrow, and the lower your monthly payment can be. Plan to pay 10-20% of the total purchase price. 

3. Consider Your Loan Options 

You don’t have to finance your boat through the marine dealer that you buy the boat from. If you’re buying the boat from a private seller, you won’t have that option and will need to consider other financing options. 

The best way to finance a boat is not the same for everyone. Typically, it will be a secured loan. This article explains how you can secure a personal loan for your purchase. 

However, financing for boats can be unconventional. Consider taking out a second mortgage or line of credit. This is borrowing against your home’s value and the equity you have in it. 

4. Use a Boat Financing Calculator

Before you make any decisions, use a boat finance calculator to determine how much you want to borrow. You need to do this before you go boat shopping. Otherwise, it’s very easy to fall in love with a boat that is way outside of what you can afford. 

When using these calculators, consider your income, credit score, the monthly payment you can afford, and the type of boat you want. 

5. Hire a Boat Surveyor 

Before you buy any boat, hire a marine surveyor to come out and take a look at the boat. They will inspect it and evaluate its condition. This will help you avoid unexpected expenses for repair bills. 

Some marine lenders also require a survey, so doing this gets you ahead of the loan process. 

Buy Your Dream Boat 

These tips will help you know the best way to finance a boat. As you can see, boat financing isn’t very different from buying a car or house. You need to know your current financial situation to determine what type and size of boat you can buy. 

Check out our other finance articles for more helpful money advice on making large purchases and taking out loans.