Considering Your Options for Boat Loans? Read This First

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

boat loans

Anytime you see an item with a price tag that ends in a comma and three zeros, think twice about borrowing money to afford it.

That goes for boats too.

Boat loans — and other personal loan options — might get you out onto the water faster. But they also can sink your finances if you’re not careful.

How to spot the best boat loans

If you type the words “boat loans” into your browser, it won’t take long to be inundated with offers from banks, lenders, and associations. Many of them will help you finance the down payment of 10% to 15% on a new or used boat or equip you with enough cash to buy one in full at the dealership.

You’ll notice some trends about these offers. Many require that you borrow a minimum of $5,000 and allow you to borrow as much as six figures, for example.

As with other kinds of online personal loans, you’ll be able to fill out an application and receive a preapproval (or rejection) in as little as 24 hours.

Your credit could make or break your chances of approval. To qualify for boat loans from Boat Owners Association of The United States, for example, you need a credit score of at least 680. Similarly, Bank of the West says its “preferred” range starts at 670.

Your credit score won’t just get you in the door. It also will decide your interest rate.

Some lenders list rate ranges, showing that you can score a better rate by borrowing more money. As of April 20, 2018, SunTrust Bank, for example, offered rates between 5.44% and 9.69% for a $5,000 boat loan with a term of 24 to 36 months.

For a $10,000 loan with the same term, its rate range decreased to 4.04% to 7.59%. Make sure to check with SunTrust Bank for the latest available rates.

Don’t be fooled by lenders that list only their lowest possible rates. You’ll want to compare the rates you can qualify for based on your credit. Also, unlike typical personal loans, which are repaid in five years or less, some lenders might offer repayment terms of a decade or longer.

Still, to secure the best possible boat loan, avoid the following:

  • Variable or “floating” interest rates that can change over time
  • Prepayment penalties for repaying the loan early
  • Repayment terms that don’t fit your financial situation

No matter where you apply for boat loans or top-rated personal loans, you’ll need to provide financial documents to prove you can afford the boat you’d like to captain.

Consider the downsides of boat loans

Using a loan to buy a boat allows you to set sail much faster.

However, purchasing a boat is a lot like driving a new car off the lot — it begins to lose its value almost immediately. Some estimates say your boat’s value could drop by as much as 20% within a year.

That’s the problem with using a form of credit to buy a depreciating asset. You’ll repay more over time than what the boat is worth.

Worst of all, if you can’t make your payments on a boat loan that’s a secured personal loan, the boat will be the first thing you lose. Secured loans require you to put up collateral that can be seized when repayment goes south.

If you take out a boat loan that’s an unsecured personal loan and struggle in repayment, you might be at risk of dealing with a collections agency and having your wages garnished. Neither scenario is something to look forward to.

If you decide to borrow money to pay for a boat, come up with a plan for repayment before signing your name on the dotted line. This way, you’ll fully appreciate how much interest you’ll be responsible for over the long haul.

Say you take out an unsecured personal loan for $10,000 at a fixed rate of 15.00%. Over a five-year repayment term, you’ll fork over a total of $14,274, including $4,274 in interest.

Use our personal loan calculator to consider other scenarios. Even if you have excellent credit and qualify for a low, fixed rate on a boat loan, you’ll want to see how much the loan really will cost you.

Avoid boat loans if you can by budgeting for your purchase

Setting a savings goal isn’t the fastest way to head out to sea, but it’s the most responsible.

You could start by creating a line item on your budget. Put aside a certain amount of each paycheck. Add it to whatever savings you can afford to part with and wait until you have the amount you need.

Say you’re eyeing a $30,000 boat, for example, and have $20,000 in extra savings. You could cover that $10,000 gap by setting aside an extra $500 over the next 20 months. You’ll miss a couple of summer seasons, but you won’t have to worry about paying off debt.

Although your boat will lose value over time, you also could strategize ways to increase its value to you. For example, rent it out instead of letting sit on the dock when you’re not using it. You might consider listing it on a website like GetMyBoat — one of a handful of ways to make money off your property.

Buying a boat isn’t among the best uses of a personal loan. If you decide borrowing is your best option, however, at least ensure you’ll be equipped to pay off the loan before your repayment term expires.

After all, you won’t be able to enjoy the wind blowing through your hair when there’s a big debt weighing on your mind.

Note: Student Loan Hero has independently collected the above information related to boat loan rates, terms, and credit score requirements. Boat Owners Association of The United States, Bank of the West, and SunTrust Bank have neither provided nor reviewed the information shared in this article.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal Loans: Fixed rates from 5.950% APR to 14.740% APR (with AutoPay). Variable rates from 5.825% APR to 14.365% APR (with AutoPay). SoFi rate ranges are current as of May 18, 2018, and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.825% APR assumes current 1-month LIBOR rate of 1.90% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Fixed interest rates range from 4.99% – 16.24% (4.99% – 16.24% APR) based on applicable terms. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank


Upgrade Bank Disclosures


  • Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.
  • Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

7.73% - 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
5.83% - 14.74%1$5,000 - $100,000
Check rate nowon SLH's secure site
5.96% - 35.97%*$1,000 - $50,000Visit Upgrade
8.00% - 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
4.99% - 29.99%$10,000 - $35,000Visit FreedomPlus
4.99% - 16.24%2$5,000 - $50,000Visit Citizens
15.49% - 34.49%$2,000 - $25,000Visit LendingPoint
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.49% - 18.24%$5,000 - $75,000Visit Earnest
9.95% - 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

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