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Boat Financing: How To Get a Boat Loan Preapproval

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A boat loan preapproval can help you navigate the potentially choppy waters of boat financing. Most boat loan preapprovals only require a few minutes to apply and you’ll typically receive an answer within two to 48 hours, depending on the lender. Whether you want to make waves in a speedboat, cruise in a yacht or drift slowly in a fishing kayak, a boat loan preapproval can help you cast off with the lowest rates.

Most boat loans include fixed monthly payments and a fixed interest rate. Here are the five steps you’ll take to get into the boat of your dreams.

1. Pick a boat

At a minimum, you’ll need to know roughly how much you want to borrow, the type of boat you plan to buy and whether you want to buy new or used. You may have to pick a specific boat to get a preapproval, but don’t sweat it — you can see whether you’re approved, estimate your payments and get a hard offer. You’re not contractually obligated to purchase a boat just because you received a preapproval.

2. Be sure that you can afford it

Before you fill out the paperwork, use a boat loan calculator to determine whether the payments will be comfortable for you. The preapproval lender will be doing the same thing.

3. Apply for a boat loan preapproval

With a boat and budget in mind, it’s time to shop around for the best lender for your financial needs. Consider seeking a preapproval from your local credit union, your current bank or a company partnered with the National Marine Lenders Association. Compare the rates they advertise to our list of best boat loan rates.

  Tip: If you’re not impressed by the rates you receive, or you want to finance a special type of boat, skip to step four to read about other boat financing options.

As you look for preapprovals, you’ll find that some lenders offer “prequalification,” which is different. Prequalification only works from a ballpark estimate of your finances, since it doesn’t pull your credit. A preapproval pulls your credit report so it can give you a hard offer.

Getting preapproved with several lenders, however, won’t create a nautical storm for your credit report. While a preapproval will temporarily impact your credit, the three major credit bureaus count all credit pulls done within a 2-week time frame as a single ding against your score.

4. Consider other loan types

Home equity loan or home equity line of credit (HELOC)

If your dream boat costs a small fortune, or if it’s one of several large purchases you plan to make, a home equity loan or a HELOC can be a great choice. Loans backed by real estate collateral generally have some of the best interest rates consumers can find, and you can use the money you borrow for anything. But if you don’t repay the loan, your home can be at risk.


 Typically low rates

 No boat requirements

 Can do anything with the cash

 You must have home equity

 Defaulting on the loan can put your home at risk

Personal loan

This could be the best loan choice if you want to buy a fixer-upper vessel, as it won’t have to meet lender requirements. Unsecured personal loans have the advantage of relying only on your credit and income — not the boat itself — and you can use the money you borrow for anything. The trade off is that rates tend to be higher than with secured loans.


 Boat doesn’t have to meet lender requirements

 Can do anything with the funds

 Widely available from many lenders, including credit unions

 Rates are typically higher than secured loans

 Highly dependent on your credit score (and your co-applicant's score, if you have one)

Powersport loan

If your boat is on the smaller side, a powersport loan might do the trick. Like a traditional car loan, a powersport loan is secured by the boat and repaid over a set loan term. They can be super convenient to apply for at the boat dealership. However, dealers can inflate your interest rate, so be careful and get a boat loan preapproval to ensure you’re getting the best deal.


 Often convenient; frequently available at dealerships

 Generally lower rates than personal loans

 Vessel must meet lender requirements

 Funds can only be used to purchase the watercraft

5. Head to the dealer with your best boat loan preapproval

With your preapproval in your back pocket, head to the dealer. After you decide on an exact boat and negotiate its price, start talking about boat financing.

  Tip: Often dealers will talk about monthly payment because it gives them the wiggle room they need to increase their profit. To keep things shipshape, discuss boat price and boat financing separately. Focusing on the out-the-door price (rather than your monthly payment) is a smart way to get a good deal.

Show the dealer your lowest interest rate preapproval and ask if they can beat it. If they can’t, you’ll know your in-hand offer is solid. If they can beat it, you’ll know you got a good deal. Either way, you’ll soon be hitting the waters in your own boat and making lasting memories.


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