How to apply for a boat loan in 5 steps
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How to apply for a boat loan in 5 steps

May 23, 2023
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A boat loan is a type of installment loan used exclusively to finance a boat or similar craft. Boat loans work like car loans and the application process will probably be the same.

However, boat loans are larger than most installment loans and are therefore more difficult to obtain. Before applying, it is essential to know the details of the application process to increase your chances of approval.

1. Check your creditworthiness

Boat loans often require a higher credit rating than car loans and most personal loans. You are unlikely to be approved if you have a score lower than "very good" or "excellent."

The FICO credit score is the most common evaluation model and is often used by lenders as part of the application process. If you have a FICO score below 740, your chances of being approved are likely to decrease. However, each lending institution has different requirements. Therefore, it is advisable to check specific criteria before choosing a credit institution.

How to check your credit score

There are many ways to check your score for free. For example, you can check your credit report for free once a year at If you have a credit card, you are likely to have access to your score and report for free, which is an added benefit to the cardholder.

You can also purchase your score from the three credit institutions (Equifax, Experian and TransUnion) by paying a small fee. Ultimately, how you choose to monitor your score does not affect your credit score, and it is important to monitor it. Monitoring your credit will help you understand why your score is increasing or decreasing, which can help you improve your credit and increase your chances of getting a boat loan.

2. Calculate the loan amount

Before applying for a loan, calculate to the penny the amount you need to borrow, including related expenses such as maintenance, insurance, and port fees.

An accurate figure will help you avoid borrowing too much. If you borrow too much, you will probably end up spending more than you initially borrowed because of the interest that accumulates on the principal amount. It is also important to know how much you need, as each lending institution has different requirements and maximum amounts you can borrow.

To do this, you need to look carefully at your budget, your assets and your financial health, but also use a loan calculator. A loan calculator helps you determine your potential repayment schedule and monthly payments based on the details of your loan.

3. Prequalify and compare lenders

Prequalification is an option offered by most online banks and lenders. It allows you to check eligibility and expected rates without affecting your score. That said, if the institution offers prequalification, there are few situations in which you should not take advantage of this benefit before applying.

Prequalify at least two lending institutions and then compare offers to more easily find the lending institution best suited to your credit situation. If the rates offered are similar, analyze the advantages of each lending institution to determine which is the best option for you.

When visiting lenders' websites, look for benefits such as interest rate discounts for signing up for automatic payments, exclusive financial resources and guides, or personalized customer service experiences for their members.

4. Gather the necessary documents

When applying for a loan, starting the application and finding that you do not have the necessary documents in hand can be one of the most frustrating experiences for the borrower.

Most lenders boast of offering same-day financing and quick application procedures; however, the process will not be easy if you do not know exactly what you need in advance. As a general rule, it is a good idea to have your ID card, identification and national insurance number handy.

As with credit scores, each lending institution has different requirements, so read the criteria carefully before starting the application. Having your documents ready and prepared can also help prevent your application from being rejected if incomplete.

5. Submitting the application.

You can submit the application on the institution's website or in person if there is a store near you. Once you complete the application, you may receive notification of your status the same day or it may take several business days, depending on the lending institution.

Once the application is approved, the lending institution will contact you with disbursement information and notify you when you can receive the funds in your checking account. Some companies pride themselves on their exceptional customer service and may provide a personal representative to guide you through the process.

Frequently asked questions.

What credit score is required for a boat loan?

Most lenders require a credit score of 700 or higher. If your score is lower, you may still qualify for a boat loan, but you will not get the most competitive rates and terms. Also, if your score is not higher, you may have to make a larger down payment.

How do you qualify for a boat loan?

Each lending institution has its own criteria, but most accept borrowers with good or excellent credit, a low debt ratio and a stable income.

What is the typical term of a boat loan?

Because boat loans are generally larger than other loans, they often have an average repayment period of 15 to 20 years. However, the exact repayment period will ultimately depend on the amount borrowed and the size of the down payment made.

Is it possible to obtain a boat loan?

Although it depends on the specific circumstances, most lenders will not approve a loan for a boat, barge or similar vessel. However, borrowers have the option of applying for a boat loan or personal loan to help finance costs, or they can apply for a mortgage line of credit (HELOC) to purchase the boat.

Is it possible to repay a boat loan early?

Some lenders allow early repayment of a boat loan, while others charge an early repayment fee-that is, they charge the cost of early repayment. Before making further payments, read the terms and conditions carefully to ensure that you do not have to pay additional fees for early repayment of the loan.

Jessica Parker
Written by
Jessica Parker
Loans, Mortgage, Insurance
Jessica Parker is a senior content creator with years of copywriting experience. She joined Empire Finance Pro in 2018. She holds a Master’s degree in journalism from Northwestern University, and her work has appeared in a number of top-tier finance publications including Forbes, FinancialTimes and Bloomberg.