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How to Find the Best Boat Loan Rates


While home and auto loans tend to get the most coverage, some would prefer to spend most of their free time out on the water. If you love boating and are considering becoming a boat owner, you’ll want to start by looking into how to find the best boat loans and interest rates.

This article will walk you through the different types of boat loans including common terms and interest rates so you can find the best option for you.

Average Boat Loan Interest Rates

There are many different ways to obtain a boat loan. You can get a personal loan, a home equity loan or line of credit, or you can finance your boat through your boat dealer.

Boat loan interest rates are currently around 3.89% to 7.49% according to Essex Credit. Whether you’re looking to refinance or purchase a new or used boat, these rates are pretty standard.

Be mindful that some rates are fixed while others are variable. Fixed-rate boat loans stay the same throughout your repayment term so your monthly payments never change.

With a variable rate loan, boat loan rates can start out low and could go up depending on the market so your payments can fluctuate over time.

What Determines Boat Loan Interest Rates?

Boat loan interest rates are determined mainly by your credit rating, along with the loan term. Generally, the longer the repayment term is, the higher the rate can be. That being said, the more you borrow, the lower your interest rate may be as well since you’ll have more to repay.

For example, as you can see on Essex Credit’s boat loan rates page, if you were to take out a $10,000 to $14,000 boat loan, you’d pay an average interest rate around 5.99% for a 48-60 month loan term, but your interest rate would increase to about 7.49% if you were to increase your term to 121-144 months.

Another factor that can determine boat loan rates is the age of the boat you’re trying to buy. Boats that are a model 2004-2007 or newer will typically have better interest rates than older boats, which are considered a riskier purchase because they may have more problems down the road.

Tips to Scoring the Best Boat Loan Interest Rates

Ideally, you’ll want to score the best boat loan interest rate if you’re going to finance a boat. Boats can be expensive, and financing any purchase is a big deal so you’ll want to make sure you’re getting a good price that you can afford to pay back without any issues.

To do that, you’ll need to focus on obtaining a low interest rate. With a low interest rate, you can pay off your boat loan faster since more of your payment will go straight toward the principal balance. When you start out with a low interest rate, you also won’t have to worry about going through the trouble of refinancing your boat loan later down the line.

Here are some of the best tips to help you score the best boat loan interest rate.

Research and Compare

Your first step when getting a boat loan is to do the proper research on all your options. There are many boat lenders out there and you want to choose the one that best meets your needs.

Just like with buying a house or a car, you want to ask yourself how much you can truly afford to finance and what you want your monthly payment to look like.

If you want the best interest rate offers on your loan, you need to check your credit score and improve it, if needed, before applying. You can check your credit score for free on LendingTree, or you can see if any of your credit card holders provide you with a free credit score.

If you want to look at your entire credit report to make sure everything is accurate, you can do this for free annually at AnnualCreditReport.com.

Once you know your credit score, you can use a boat loan calculator to determine how much you can afford. LendingTree has a free boat loan calculator you can use to calculate what your monthly payment can be based on the loan amount, term, and interest rate.

When you use LendingTree’s calculator, you can also compare loans across multiple lenders so you can find the best one that fits your budget. Running the number ahead of time with a boat loan calculator is a great way to make sure you have an idea of how much you could be paying so you’re not blindsided when you get approved for a loan, along with ensuring you receive the best rate after comparing multiple lenders.

Consider a Shorter Term

Another way to help you get the best interest rate when applying for a boat loan is to consider a shorter term. As stated a little earlier, buyers who take out a boat loan with a shorter term can score a better interest rate. With a lower interest rate, you pay less interest overall on your loan, plus, you can pay your loan off quicker with a shorter term and be able to enjoy your boat to the fullest.

In order to confidently reduce your repayment term, you need to make sure you can afford the monthly payments for your boat. You can do this by choosing a boat with an overall price that fits within your budget. If you know you can’t afford a $35,000 brand new boat and don’t want to spend several years making payments on the loan, don’t purchase a boat that expensive.

Also, consider the costs of maintenance and repairs for your boat when you’re trying to shorten your term and choose an affordable boat. Be sure to use the boat loan calculator linked above to run some numbers and compare different loan offers.

Negotiate Offers

Finally, you’ll want to negotiate offers to get the best interest rate on your boat loan. Once you do your research and compare loan terms, you’ll have the power to negotiate with lenders to get the best rate.

If you think you can pay your loan off in a shorter term, see if the lender will offer you a lower boat loan rate for knocking a few months off the repayment term or setting up automatic payments.

If lenders want your business, they may be able to budge on some of their terms and beat their competitor’s interest rate. If your credit is great, you’ll have little problems negotiating with lenders after you’ve compared all your options.

Final Word

Financing a boat can be exciting but it should not be a rushed decision. You need to take the time to do your research, compare offers, and know where your credit stands. Be sure to use a boat loan calculator and consider utilizing the tips mentioned above to lower your boat loan rate.

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