Planning to purchase a boat or other type of marine vessel? A boat loan can help you access the funds you need to get out on the water.

Just like a car loan or any other type of loan, a boat loan will enable individuals to borrow funds to finance a boat purchase. Borrowers will have to make recurring repayments over the term of the boat loan to pay back the borrowed amount, plus the cost of interest.

Boat loans are generally offered under secured and unsecured terms.

Secured boat loans involve borrowers providing collateral to provide more security for the lender. In the event that the borrower is unable to make repayments or default on the boat loan, the lender will be able to take possession of the collateral in order to recoup the outstanding amount owed. In most arrangements, the boat to be purchased will serve as the collateral, but borrowers are also able to offer other types of assets as collateral.

Unsecured boat loans do not require borrowers to provide collateral, which in turn results in a higher risk for lenders. This higher risk is compensated with higher rates of borrowing interest.

When considering between secured and unsecured boat loans, borrowers should remember to weigh the potential costs of each against their personal financial situations and preferences.

Considerations for Taking on a Boat Loan

  • New vs. used boat – There are significant differences between buying a new or used boat, not just for the quality and performance vessel, but also for the loan terms and approval process. In general, new boat purchases are more suitable for use as collateral for a secured boat loan.
  • Loan affordability – Taking on a boat loan is a financial commitment, and borrowers should carefully assess their ability to repay the loan, with the support of a broker. Using a loan and repayment calculator can help to provide accurate estimations for proper budgeting.
  • Additional costs – In addition to loan repayment amounts, borrowers should also account for other costs and expenses related to owning the boat, such as maintenance and registration fees, as well as the fees of taking on the boat loan itself.

Explore Motor Vehicle Loans