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The best boat loans of July 2021
*With auto-pay discount
The best boat loan depends on your budget, the type of boat you’re purchasing, and the age of the boat. From financing for small ski boats to full-size yachts, there’s a loan out there for most things that float. But they’re not all the same.
Once you’ve narrowed down the type of boat you’re interested in buying and what model year you’re looking for, you can start shopping for a boat loan. Many lenders will only finance certain types of boats, or require a boat to be newer than a certain model year. To make sure you make the most of your shopping, know this going into it.
There aren’t as many lenders offering boat loans as there are auto loans. But there are still a few to choose from.
Here are Insider’s top picks for boat loans in June 2021.
LightStream boat loans are a strong option for most borrowers looking for an inexpensive boat and fast funding.
LightStream is an online lender backed by Truist (Member FDIC). With a completely online experience, same-day funding available, and many loan types offered, LightStream is one of our picks for the best RV loans and best personal loans.
LightStream offers boat loans that have relatively low interest rates and no fees. Loan amounts range from $5,000 to $100,000, which provides a large range that will fit most budgets. Coupled with the lowest starting interest rates of the competition, LightStream’s loans are a strong option.
LightStream doesn’t list any specific types of boats that it will or won’t finance on its website. With LightStream boat loans, the boat itself isn’t used as collateral to back the loan; the loan is treated as an unsecured personal loan. That opens up more possibilities for a variety of model types and older boats that other lenders don’t finance.
Boat loans through Bank of the West and its lending division, Essex Credit, are a good option for people planning to get a boat loan of $50,000 or above.
A $10,000 boat loan with Bank of the West would have a starting interest rate of 8.89%, a $15,000 boat loan would start at 8.39%, and a $50,000 loan starts at 4.29%. While their rates for loan amounts over $50,000 are competitive, anyone looking for a smaller loan may find a better rate with LightStream.
It’s worth noting that this lender does have a loan processing fee that could add to your total cost of borrowing. A 10% down payment is also required for loans between $10,000 and $200,000, and percentages increase for higher loan amounts.
Additionally, Bank of the West adds 0.5% to all interest rates for houseboats and high-performance boats, and adds 0.25% to interest rates for boats between model year 2001 and 2010.
SunTrust offers fee-free loans that are best for financing a large boat purchase. SunTrust picks up where LightStream leaves off — anyone looking for a smaller loan should consider a loan from LightStream.
SunTrust’s minimum loan amount is $100,000, and it only finances boats over 30 feet. It’s worth noting that the bank does require down payments, starting at 15% for standard boats up to $500,000.
For people looking for houseboat loans, SunTrust could have an advantage. While Bank of the West adds extra charges to boat loans for houseboats, SunTrust doesn’t, and that could make this lender cheaper.
Other lenders we considered
- US Bank: This lender’s loan interest rates weren’t the most competitive, starting at 5.24% for a new boat. The bank states that rates may be higher for private party boat purchases, loans under $25,000, and used boats. Ultimately, lower rates may be available elsewhere.
- USAA: USAA is only available to people with military affiliations, limiting the number of people who can access these loans. However, even those eligible could get a better rate from one of our top picks — interest rates start at 5.25% with USAA, about a percentage point higher than a LightStream loan.
- Navy Federal Credit Union: Like USAA, membership with this credit union is only available to certain people. However, a starting interest rate of 5.95% for new boats and 7.45% for used boat loans mean there are better deals to be found elsewhere.
- Boat US: This online boat loan marketplace didn’t beat interest rates offered by other lenders. A high minimum loan amount of $25,000 also may be more than many borrowers need.
Frequently asked questions
How did we choose the best boat loans?
Personal Finance Insider’s goal is to help smart people make the best decisions with their money. We combed through the fine print of many boat loans and lenders so that you don’t have to. We considered the factors that are the most important to boaters, including:
- The type of boats financed: We searched for lenders that offered loans for the most shapes and sizes of boats, from houseboats to sport boats.
- Interest rates: We compared the starting points of interest rates from many banks, and compared ranges where available.
- Few or no fees: We looked for lenders that offered boat loans with the fewest amount of fees on each loan.
- Loan amounts: We chose lenders with the widest variety of loan amounts available to help everyone find a loan for their boat-buying budget.
- Widespread availability: Lenders we considered have loans available in almost all 50 states, if not all.
How do boat loans work?
Boat loans function similarly to auto loans or mortgage loans that you may have gotten before. Here’s how the process works:
- Find the boat before you start looking for financing. Many lenders ask for information about the boat in the financing application, so you’ll need to know exactly what you want to buy.
You’ll need to have good credit. Most of the lenders we looked at for this roundup required a credit score of 700 or above.
- You may be asked for a marine survey. You may be asked to have a marine survey completed to ensure the boat is in proper functioning order during your purchase process. According to the National Marine Manufacturers Association, the typical marine survey will cost between $20 and $25 per foot. This is most commonly required for people buying a used boat.
Expect to make a down payment. Like with a home or a car loan, you’ll likely need to make a down payment for your boat loan. The percentage requirement varies by lender and the amount you’re financing, but it’s generally between 10% and 20%.
What is the best place to get a boat loan?
You have two options on how to search for a boat loan: in person at a boat dealership, or online.
If you’re looking to buy a loan from another individual — also called a private party purchase —searching for an online boat loan is likely your best bet. Online lenders will often allow borrowers to purchase boats from either a private individual or through a dealership. It’s a more flexible option that may open the possibilities to include more affordable, used boats.
Can you get a loan on a used boat?
Yes. All of our top-pick lenders offer loans for both new and used boats.
How long are boat loans?
The typical boat loan’s length depends on the amount financed and your lender. While a smaller loan may have terms between 24 and and 72 months, higher-dollar boat loans could last as long as 240 months, or almost 12 years.