Most buyers finance at least part of a boat purchase, and a marine loan works differently from a car loan or a mortgage in a few ways that are worth understanding before you start shopping. The short version: get pre-qualified early, make the offer contingent on financing, and expect the lender to care about the boat almost as much as they care about you.
Talk to a marine lender before you make an offer
A pre-qualification tells you what you can realistically spend and makes your offer stronger, because the seller's broker can see you are ready to close. Specialist marine lenders understand boats, surveys and documentation in a way a general bank often does not, and many buyers use them for exactly that reason.
Bring the same things you would for any loan: income, assets, existing debts and your credit history. The lender will also want to know about the boat itself once you have one in mind.
What the lender looks at
A boat loan is underwritten on two things: you, and the boat. On your side, lenders look at credit, income and your total monthly debt. On the boat side, they look at its age, its value and its condition, which is why most lenders on a used boat will ask for a copy of the marine survey before they fund.
- Your credit history and total monthly debt
- The down payment you are putting in
- The age, type and size of the boat
- The surveyed value and condition of the boat
- Proof of insurance before closing
Down payments and loan terms
Expect to put money down. The amount varies by lender, by the size and age of the boat and by your own finances, so ask each lender for their actual numbers rather than relying on a rule of thumb.
Loan terms on boats tend to be longer than on cars, and larger or newer boats usually qualify for the longest terms. A longer term lowers the monthly payment but raises the total interest paid, so it is worth running both numbers before you choose.
How financing fits into the offer
When you write an offer, financing goes in the contingencies section along with the survey and sea trial. That protects you: if the loan does not come through on acceptable terms, you can step away under the terms of the agreement.
The timing matters. On a typical deal the Acceptance of Vessel date falls about three weeks after the offer, with closing about a week later, so roughly 30 days from offer to close. Your lender needs the survey report inside that window, so book the surveyor early and tell your lender the dates on day one.
Documentation and titling
Larger boats are often federally documented with the U.S. Coast Guard rather than titled by the state, and many lenders prefer documentation on bigger loans because it allows them to record a preferred ship mortgage. Smaller boats are titled in the state where they are kept. Your broker and your lender will tell you which applies to the boat you are buying, and the closing handles the paperwork either way.
Want a broker to walk you through it?
How buying a boat works
