Boat Financing Basics

In order to buy a boat (or, well, anything), you need to have the money for it. Most people do not have the ready cash up front to purchase a boat, which is why boat financing is so popular and essential. Here at New England Water Sports, we have a dedicated boat financing department to serve you, but this quick guide will also give you some tips on how to go about financing your boat.

Your Own Finances

Even with financing, you still need to make sure that your budget is in order for your boat purchase. Typically, you’ll need to put up 10% to 20% of the total sticker cost of a boat as a down payment when you first buy it. 

You’ll also need to do some math to figure out how much you can afford to pay each month on your boat loan. Don’t forget to factor in additional costs of boat ownership, such as regular maintenance, insurance, fuel, storage, and parts.

Something you may want to do now to increase your chances of approval is to check your credit score and see if you can raise it. Lenders look for lendees with good credit scores. Over 700 is ideal; under 550 is extremely poor.

Loan Types

Boat loans can either be secured or unsecured. A secured loan uses your boat as collateral, which means that the lender can repossess your boat if you default (stop paying) your loan back. These loans do come with higher lending amounts and low interest rates.

Unsecured loans do not require your boat to be put up as collateral, but you are still on the hook if you stop paying them off. You may suffer from wage garnishment or a subpoena if you don’t pay these loans back. Unsecured loans are easier to qualify for, but they have low borrowing amounts and high interest rates.

Ready to buy a boat? Stop by our location in Naples, ME, to take a look at our great selection of new and used boats for sale. New England Water Sports proudly serves our Maine boat customers who spend their days on Long Lake and Sebago Lake.