Four Prime Options for Financing a Boat Purchase

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There are several key events in a person’s life when they can truly say that they’ve made it. Buying a boat is certainly one of these events. Not many people can, however, cash out such an extravagant sum of money. Some kind of financing is required. Luckily, there are several options you can choose from, depending on your personal preference.

But even before you start thinking about financing, you will need to check the boat you are buying. This is called a pre-purchase marine survey. It is done by professional surveyors and is a vital part when buying a used boat. If you are buying a new boat, you can skip this part, but do yourself a favor, and find a good mechanic in your area, such as San Diego’s Propulsion Controls Engineering to handle your new boat’s maintenance.

Options for Financing a Boat Purchase

Once you’ve got that out of the way, you can start thinking about financing. Here are some options.

Credit Card

The vast majority of Americans have at least one credit card, according to They make our lives simpler and enable us to make large purchases and pay them off gradually in smaller increments. So, purchasing a boat using a credit card is possible if your limit is high enough. However, as any savvy shopper will tell you, the interest rates on credit cards can be quite high. The only reason to go through with it is if your credit score is somewhat poor and your credit card limit is high enough. There are some better options, too.

Personal Loan

Now, if your credit score is good, your best course of action is taking out a personal loan. However, not all bank loans are the same, so make sure that you check with several different banks to get the best deal. You will most likely have to put down a small payment, typically 10 to 15 percent of the total sum. Your chances of getting a better deal are greatly increased if you have an established connection to the bank i.e. if you have been with one bank for a longer period of time.

You might also be able to negotiate a lower interest rate if you put down a larger percentage of the full sum upfront. It is important that you realize that the interests on boats are going to be higher than on houses or cars. Banks and credit unions explain it as a way to protect themselves. If you hit a rough patch, you are far more likely to drop boat payments than house payments.

Seller Loan

Your seller may actually be able to offer you a loan without the need to go through a bank. This option can actually be really solid and offer you a competitive price. The main advantage of this financing method is its simplicity. You get your boat and your financing from the same place, and the seller is the one doing all the boring paperwork to ensure you get your loan approved.

Another advantage of this method is that you may be able to negotiate a no-down payment. The downside is that you may be subject to higher rates. You might be able to avoid the brunt of this financial shock if you pay off the boat relatively quickly, though.

Home Equity Loan

This is an interesting option. It enables you to tap into your estate’s value in order to pay for your boat. However, that is not the reason it is so popular. The real reason is that you can actually deduct your home equity loan interest for your federal taxes. In essence, your interest on the boat purchase is deducted from your taxes.

However, this option is not perfect. If you have little equity in your property, you won’t be able to borrow much money. However, even if you do, make sure that you can cover payments for both mortgage and boat before you take out this type of loan.

Which option is most appealing to you? Feel free to discuss in the comments below. Whichever option you go in for, happy boating.

Financing a Boat Purchase




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DollarBreeders is a personal finance blog dedicated to people who want to take control of their finances and secure their future. Here you will find personal stories to inspire you to make better and more informed financial decisions. We aim to help people understand personal finances better and meet the challenge of living comfortably within the budget.