Can You Get a Loan on an Old Boat?

If you’re interested in getting a boat, you may be tempted to buy an older model since it will most likely have a lower price. While many used watercraft still have plenty of life left in them, one aspect that can be challenging is finding a lender that will let you finance the purchase of an older model.

In this post, we’ll explain how to find boat loans for older models and what you need to know before you make your purchase.

Is it possible to get a loan for a used boat?

The short answer is “yes.” While many lenders prefer to finance the purchase of a new boat or at least one that’s less than ten years old, others may lend for the purchase of watercraft as old as 25 or 30 years. Of course, a lender’s decision will depend on a variety of aspects of the boat, like its condition, size, market value, etc.

The potential borrower’s financial situation is also important.  For the best chance of success in finding a lender to work with you, you’ll want to have:

• A high credit score
• A low debt-to-income ratio
• A great employment history
• Positive net worth

To make the best use of your time, keep in mind that it helps to get prequalified for a boat loan before you start to seriously shop around.

Why don’t some lenders finance used boats?

Just like with a car, a boat immediately starts to depreciate right from when you purchase it. Within the first five years, a boat may lose anywhere from 25 to 50 percent of its market value depending on various factors. Since the boat serves as collateral for the boat loan, the lender doesn’t want to be stuck with an asset that may already be fully depreciated if the borrower defaults on the loan.

What differences are there between a new and a used boat loan?

If you find a lender who’s willing to let you finance an older boat, you may encounter the following loan terms:

• Higher interest rate
• Higher down payment requirement
• Higher minimum loan amount
• Shorter repayment period

Other factors to consider

Buying an older boat may seem like you’re getting more bang for your buck, but there are some additional expenses to consider.

For instance, a used boat is likely to already have significant wear and tear and may require more extensive maintenance. The boat’s mechanical systems, such as the engine, might also need to be replaced sooner.

Whether you get a new or used boat, don’t forget to also factor the following recurring expenses into your budget:

• Insurance premiums
• Registration fees
• Fuel
• Marina fees / storage costs

What if you can’t get approved for a used boat loan?

If the boat you’re thinking about buying is too old, even for a used boat loan provider, you may still have other options.

One option is applying for a personal loan online. Personal loans can be used for any purpose, from paying for a wedding to starting a business and, of course, buying a recreational vehicle.

To get a personal loan that’s large enough to purchase a boat, it may need to be a secured loan. This means the lender will require you to pledge collateral such as your home or a vehicle. Be aware that you’ll want to make good on your payments, or you may jeopardize losing your collateral.

The Bottom Line

Some lenders will work with you on financing an older boat. Approval depends on several factors with respect to the watercraft and your financial situation. If you can’t find a lender or don’t qualify, you also have the option of applying for a personal loan.