Did you know that, in 2019, US boat sales reached the second-highest volume in over ten years? In 2020, this trend has continued, with boat sales booming because of so many people looking for fun ways to spend their time outdoors.

If you’re thinking of buying a fishing boat, then it’s a great time to do it, with so many options out there. But maybe you’re worried about your fishing boat financing.

Boats, especially new ones, can be pricey—and because it’s a lifestyle expense and not something you need like a house or a car, it can be not easy to justify this purchase.

Even if you can justify it, you then have to find a fishing boat within your budget or get creative finding ways to adjust your usual budget or pay for it. While it’s fun to shop around, it’s also overwhelming to think about all these decisions and financial stressors.

Fortunately, there are some great fishing boat financing options out there. By knowing what they are, you can finally buy that fishing boat you’ve always dreamed of taking out to that sea, bay, river, or lake nearby. Want to know more? Read on to learn all about it.

The Different Loans Available

When it comes to financing your fishing boat, you need to know the different loans available. Usually, these loans are installment loans, which means that they’re paid over fifteen years or so every month.

Much like a mortgage, they make it possible to buy your boat without having to spend a ton at once. However, like with a loan, you’ll also have to pay slightly more total, given the terms of the loan and the interest percentage.

You usually get three different kinds of loans to purchase a fishing boat: secured loans, unsecured loans, and second mortgage loans.

Secured Loans

With a secured loan, the boat itself is the collateral. In other words, if you aren’t able to pay, you’ll lose your boat. That may not seem great, but the positive of a secured loan is that you’re more likely to get more money loaned to you, and you won’t have to pay as much each month—or, you can pay off the boat for a longer period of time.

If it’s difficult for you to get a loan (which we’ll get into later), or the boat you want to buy is pricier than you can afford with an unsecured loan, this is a good option. Otherwise, you’ll want to look into…

Unsecured Loans

With an unsecured loan, you aren’t putting your boat at risk if you can’t pay it off. Instead, your credit score will be affected, and you may end up in court. However, it can still be a good choice if you’re afraid to lose your boat or other expensive things (such as your house), which you may have had to use as collateral instead.

Second Mortgage Loans

Speaking of using your house for collateral…this is another option. Instead of taking out your own loan, you’d be taking out a home equity loan, which means that you’d lose your house if you’re unable to pay off your boat loan.

This is a good option because it’s easier to get a loan on your boat this way, but it might seem too risky.

Making the Right Decision

To make the right decision on which loan is best for you, you’ll want to discuss these options with anyone else involved in your finances, such as your spouse. Getting expert help from an accountant is also a good idea.

How You Can Get a Boat Loan

Once you’ve decided on which loan is best for you, there are several different institutions and people you can get your boat loan from. Whether you’re interested in triton boats or a pontoon boat, read on to learn which one might work best for you.

Banks

Just like when they finance a home mortgage, banks have boat loans set up too. Depending on the bank and type of boat you’re buying, loans usually start at around $5,000, and go up to $150,000.

You can expect interest to be between 5 and 10 percent. As for how long you’ll be paying your loan off, this can between one year to twelve years, usually.

Marine Lending Specialists

Marine lending specialists will also give loans for boats. Basically, they’re boat brokers who manage the lending process, using traditional lenders such as banks or credit unions.

Because they’re an expert in boat loans, you can trust that they’ll get you a loan appropriate for your purchase.

Credit Unions

Credit unions work similarly to banks, but because they’re NPOs, they can be a bit kinder with their interest rates if you haven’t got the best credit score. This is a good middle-ground between getting a bank loan and trying to get the money from a less reliable source.

Online Lenders

Online lenders are another option. Instead of going into a bank or credit union, you can get a loan from a lender such as LightStream (which is actually part of SunTrust Bank).

They’re also happy to provide unsecured personal loans if that’s what you’re looking for.

However, keep in mind that, in the case of LightStream, you need a good credit score to qualify.

What Fishing Boat Financing Looks Like

Generally speaking, fishing boat financing loans work a lot like car loans. Once you’ve decided on your down payment, you’ll ask for a loan amount and let lenders know how much time you need to repay it. Once you’re approved, your interest will depend on how good your credit score is.

Down Payment

Oftentimes, lenders will require you to pay a down payment. With fishing boats, this is usually between 10 to 20 percent of the total payment. While all lenders won’t require this, it’s smart to do it anyway.

By paying off some of the cost now, you’re less likely to owe more than you can pay on the boat if it loses some of its value or depreciates. Additionally, you’ll be able to pay less every month or pay less interest.

Loan Term

Usually, the loan term for a boat loan can be up to twenty years, which means it can be quite affordable per month if you want it to be. The interest will be higher, but depending on your finances, this might be preferable for you.

If you’re getting a personal unsecured loan, terms are usually shorter, around five years. This is because of the risk involved for the lender.

Interest Rates

Interest rates for boat loans depend on how good your credit is, and the type of boat you’re buying, its model, and its year. Lender interest rates also vary, so when looking at lenders, ask about these rates.

Considerations to Think About

When you’re deciding which financing option works best for you, you need to think about your financial situation. Whether you’re buying a bass boat or another kind, here are the considerations you need to think about.

The Total Cost

Whether you’re getting one of the best fishing boats that’s just come out this year or the right boat at a discounted price, you need to think about the boat’s total cost when deciding what loan to get.

Because you’ll be paying a bit of your loan each month, you need to be realistic with what you can afford.

In addition to the cost of the boat itself, you also need to consider the costs of taxes, repairs, registration, storage, winterizing, and any kind of boat maintenance. These all add up and should be considered when calculating how much you can pay each month on your loan.

Your Credit Score

Your credit score impacts what kind of loan you can get, as well as the interest rate. If it needs improvement, consider making it better before buying a boat—or use it as it is now to help you decide what loans will be less costly to you.

Getting a Marine Survey

Unless you’re getting your loan through a marine lending specialist, or you specialize in loans yourself, you’ll probably have to get a marine survey. This will tell you how much the boat you’re buying is worth, which will impact your loan.

Need More Advice on Boat Financing?

Do you have more questions about fishing boat financing options? Maybe you have an idea of what kind of loan you want and what to find out who best to get it with. Or maybe you aren’t ready to get your feet wet and need us to recommend a marine lending specialist near you.

We have all the answers you need at Westshore Marine & Leisure. Visit our contact us page to get in touch. We’ll be happy to answer any of your questions or talk to you more about boat financing.