How Long Can You Finance a Boat?

How Long Can You Finance a Boat?
How Long Can You Finance a Boat?
Spread the love

Though boat financing is not extremely different from a car, home, or other financing, people often contemplate the length of time you can finance a boat. There are several variables (like the size of the down payment and the interest rate) that will affect exactly how much your monthly payment boils down to, in addition to the length of the term. So, other factors should also be taken into account when you fill out a loan application on paper. This article will help you know How Long Can You Finance a Boat and the boat loan term.

Boat Loan Terms:

Historically, boat loans were made for periods shorter than those extended by other lenders. This was because banks saw that boats have a limited lifespan, so they wanted to make sure that their collateral could not be depreciating more quickly than payments developed. After 10 or more years, banks considered many boats to be of deteriorating, so they would want to make sure that the value of their collateral remained stable.

As boats and their engines have continued improving and enduring longer, they have started to retain more and more resale value. As a result, lenders have become willing to finance them longer. So yes, you might have heard that boat loans tend to be short in the period. It once was true that loans for boat buying for ten years were rare, but times have changed.

so, How Long Can You Finance a Boat? Many lenders offer boat loans for 20 years. Obviously, this will likely lower your monthly payments, and it may be helpful to use the Boat Loan Calculator to calculate how monthly payments differ between 10 years and 20 years of boat financing.

Factors that Affect Boat Financing Terms:

By understanding How Long Can You Finance a Boat, you must also understand that a boat’s financing can have a direct effect on other variables we discussed previously. If you double the length of the loan, for instance, lenders could require a higher interest rate or a larger down payment that corresponds to a higher percentage of the boat’s value. If there are other circumstances that would influence a lender when determining the length of the loan term they would consider, those may include:

  • The size of the loan.
  • The type of boat.
  • The age of the boat, if it’s used.

Boat Loan Size:

Loan size has a major influence on the length of time a lender may extend financing. As a general rule, the larger the boat loan is, the longer it can be financed. Many lenders can set minimum loan amounts for specific term periods.

Type of Boat:

Most modern-day powerboats may be categorized together, but there are a select few that financiers will differentiate between.

  • Boats made from wood, such as on the beach, or boats designed for high speeds, may be given special consideration.
  • Some financial service providers often differentiate between sailboats and powerboats, and others consider multi-hull boats or pontoon boats differently.
  • Loans for liveaboards are generally different from other boat loans. There are some lenders that refuse to make loans for these vessels, so there’s one big problem that occurs from time to time.

Explore All Boat Types:

Used Boat Age:

The age of the watercraft has a significant impact on the length of time a lender is prepared to loan money for a boat. In most cases, the more modernized a boat is, the longer a loan term a lender will approve. Many lenders work on a cap of no more than 18 years when evaluating boats for boat loans.

When buying used, you also have to expect that additional loan requirements may change; some lenders have higher minimum loan amounts or different finance rates for boats created before a specific model year.

Ready to Secure Boat Financing?

Is it true that when purchasing a brand-new boat, which we strongly advise since new boat buyers report much higher levels of satisfaction, and your credit score and debt-to-income ratio are up to snuff, you will not have a problem financing a boat that meets a lender’s minimum loan amounts for 20 years?

In the event you’re taking a look at purchasing a boat, use our Boat Buyer’s Guide to help you work through all the other aspects that need to be taken into account before making this kind of purchase, and you’ll have years of enjoyable boating to look forward to.