The Average Length of Boat Loans: What to Expect When Financing Your Dream Boat

So you’ve found the perfect boat to fulfill your dreams of spending weekends on the open water. Now comes the next big step – figuring out how you’ll pay for it.

When it comes to financing a boat one of the most common questions is what is the average length of a boat loan? The answer can depend on several factors, which we’ll explore in this article.

Boat Loan Terms Typically Range from 10-20 Years

On average, boat loans can range anywhere from 10 to 20 years in length. According to Discover Boating, lenders historically only offered shorter 5-10 year loans for boats. However, as boat manufacturing quality has improved over the years, lenders are now more willing to offer longer 15, 20 year loans.

The most common boat loan lengths fall between 10-15 years. But loans at the longer end, like 20 years, are becoming more widely available – especially for larger loan amounts.

Key Factors That Determine Your Boat Loan Length

While 10-20 years is the average range your specific boat loan length will depend on these key factors

• Loan amount – The larger the loan, the longer the term lenders will approve. For example, you’ll have more flexibility to finance a $50k boat over 15-20 years versus a $15k boat.

• New vs used boat – Expect longer terms for brand new boats, since they hold value better over time. Used boats closer to 10 years may have tighter limits.

• Your down payment – The lower your down payment, the shorter your lender may cap the loan length. A 20-30% down payment gives more flexibility for longer terms.

• Your credit score – Borrowers with excellent credit (scores above 700) typically qualify for the full 10-20 year loan terms. Those will poorer credit may be restricted to shorter lengths.

• Interest rates – Going with a longer term often means a slightly higher interest rate. Make sure it aligns with your budget.

• Boat type – Unique boats like wood hulls or houseboats may have different rules than mainstream fiberglass boats.

As you can see, the average boat loan length gives you an idea of what to expect. But your specific situation will determine where your loan ultimately lands within that 10-20 year range.

Weighing the Pros and Cons of Shorter vs. Longer Boat Loans

Determining what boat loan term makes sense for you depends on weighing the key pros and cons:

Shorter boat loan terms:

• Pro: Lower interest rates, saving you money over the life of the loan
• Pro: Faster build up of equity by paying down the principal more quickly
• Con: Higher monthly payments, less affordable on a monthly budget

Longer boat loan terms:

• Pro: Lower monthly payments, increasing affordability
• Pro: Allows you to purchase a more expensive boat
• Con: Higher interest rates over the life of the loan
• Con: Slower equity build up; more interest paid overall

As you evaluate your budget and lifestyle, you’ll get a sense of what term length – and corresponding monthly payment – you’ll be comfortable with. Use an online boat loan calculator to play with different loan amount, interest rates, and terms to find the right balance.

Boat Loan Pre-Approvals: Lock in Your Rate and Term Length

Once you get a general idea of the loan details you’d like, it’s a good idea to get pre-approved by a lender. Pre-approval locks in an interest rate and loan terms, for say 60-90 days. That way, once you find the perfect boat, you can seamlessly move forward with quick financing.

Online lenders like LendingTree allow you to easily compare multiple boat loan offers side-by-side to find the best rate and term for your needs.

Setting a Budget Beforehand Ensures You Get the Right Boat Loan

Whether you end up with a 10 year loan or a 20 year loan, the most important step is determining your overall budget beforehand. This includes:

• How much you can afford in monthly payments
• Your ideal down payment amount
• Whether you’ll need to trade in your existing boat to make the numbers work

Having a budgetdialed in upfront allows you to search for boats that align with an affordable monthly payment – rather than falling in love with a boat and trying to squeeze it into a payment later.

By educating yourself on average boat loan lengths, and tailoring your financing to your specific budget and goals, you’ll be sailing away in your dream boat before you know it. Here’s to many weekends ahead enjoying the wind in your hair!