What Do I Need to Finance My Boat This Summer?

Financing a boat can be exciting, but also overwhelming if you’re not prepared. Many buyers face common problems like credit score issues, missing documents, or unclear lender requirements that can delay the boat loan process or lead to less favourable loan terms.
If you're planning to buy a boat this summer, knowing exactly what lenders look for can save you time, reduce stress, and improve your chances of getting a boat loan. In this guide, we'll discuss what you need to finance your boat with confidence.

Boat Financing Requirements

There are a few things that you need to have ready to finance a boat. Lenders want to see that you can afford the loan and are serious about the purchase. Knowing these basic requirements can make the process quicker and easier.

1. Good Credit Score

Your credit score is crucial when applying for boat financing. US-DFS considers your credit score to assess your financial reliability. Typically, a higher credit score (700 and above) can help you secure better interest rates and loan terms. If your credit score is lower, don’t worry! We offer boat loan with bad credit options tailored for various credit profiles, but you might encounter higher interest rates.

2. Down Payment

Most boat loans require a down payment, generally ranging from 10% to 20% of the boat's purchase price. A larger down payment can lower your monthly payments and reduce the total interest paid over the life of the loan. At US-DFS, we recommend saving up for this initial payment to improve your chances of loan approval and secure better terms.

3. Proof of Income

To ensure you can manage your loan payments, US-DFS requires proof of income. This can include pay stubs, tax returns, or bank statements. Providing this documentation helps us assess your ability to repay the loan and find the best financing options for your situation.

4. Debt-to-Income Ratio

Your debt-to-income (DTI) ratio compares your monthly debt payments to your monthly gross income. A lower DTI ratio (below 40%) is preferred as it indicates you have sufficient income to cover new debt obligations. A higher DTI ratio might affect your loan terms or eligibility.

5. Boat Details

US-DFS will need specific details about the boat you plan to purchase, including the make, model, year, condition (new or used), and price. For used boats, we might require a marine survey or inspection report to assess the boat's condition and value.

6. Loan Term Options

Boat loan terms can vary widely, typically ranging from 2 to 20 years. Shorter terms usually mean higher monthly payments but lower total interest paid. Conversely, longer terms offer lower monthly payments but increase the total interest paid over the life of the loan. Knowing how long you can finance a boat can help you choose the right structure for your budget.

7. Insurance Requirements

Many lenders, including US-DFS, require boat insurance before finalising the loan. Boat insurance protects your investment and our collateral in case of accidents, theft, or damage. Shop around for the best insurance rates and coverage to meet our requirements.

8. Loan Application Process

Once you've gathered the necessary documents and information, you can apply for a boat loan with US-DFS. The process generally includes:

• Pre-Approval: Get pre-approved to understand your loan eligibility and budget.

• Submit Application: Complete the loan application with all required documents.

• Loan Review: We review your application, credit, and financials.

• Approval and Funding: Upon approval, the loan funds are disbursed, and you can proceed with your boat purchase.

Things to Know When Financing a Boat

It’s very helpful to understand how boat financing works if you’re trying to purchase a boat. Some of the important things you should know that can help you avoid surprises and make smarter decisions are:

1. Loan Term Options Vary by Boat Type and Cost

Boat loan terms usually range from 2 to 20 years, but it depends on the boat’s price, age, and the type of boat you’re purchasing.

• New boats may qualify for longer terms (up to 20 years)
• Used boats, especially older ones, often have shorter term limits (e.g., 10–15 years)

Note: Lenders may not finance boats older than 15–20 years unless the condition is exceptional.

2. Be Prepared for Extra Costs

Boat ownership comes with ongoing expenses beyond the loan payment. These include:

• Boat insurance (required by most lenders)
• Maintenance and repairs
• Docking and storage fees
• Registration and taxes
• Fuel and equipment

3. You Can Choose from Multiple Lenders

When financing a boat, you're not limited to one lender. Comparing loan offers from multiple lenders can help you find the best deal for your situation. Some of the common lender options for financing a boat are:

• Traditional banks
• Credit Unions
• Marine Lenders
• Online Lenders and Marketplaces

Tip: Get qualified from different lenders before making a decision. Even a 1–2% difference in interest rate could save you thousands over the life of your loan.

Final Tips

When exploring financing options, it’s important to compare offers from various lenders such as banks, credit unions, and marine finance companies to find the most favourable rates and terms. If you have good credit, negotiate for better deals and also make sure to read all the loan details, including any fees or penalties, so there are no surprises later

By preparing these essential documents and understanding the loan process, you can secure the financing you need to set sail on your new adventure with US Dealer Financial Services.

For more details on financing options, visit our boat loan calculator and explore our loan services. Don't forget to check out our insurance services to protect your new investment. Start your application today at US-DFS Online.

FAQs: Financing A Boat

What credit score do I need to finance a boat?

While a higher credit score (700 and above) can help secure better rates, US-DFS offers options for various credit profiles. Lower scores may still qualify but might incur higher interest rates.

How much of a down payment is required?

Typically, a down payment ranges from 10% to 20% of the boat's purchase price. A larger down payment can result in better loan terms.

What documents do I need to provide?

Proof of income (pay stubs, tax returns, bank statements), boat details (make, model, year, condition, price), and personal identification.

Can I finance a used boat?

Yes, US-DFS finances both new and used boats. For used boats, a marine survey or inspection report may be required.

What are my loan term options?

Loan terms can range from 2 to 20 years. Shorter terms mean higher monthly payments but lower overall interest, while longer terms offer lower monthly payments but higher overall interest.

How do I get approved for a boat loan?

To get approved for a boat loan, you’ll need to meet a few requirements that differ among lenders. Most lenders look at:

• Your credit score
• Proof of income (like pay stubs or bank statements)
• Your debt-to-income (DTI) ratio
• Details about the boat you want to buy
• A down payment, usually 10%–20%

What credit score do I need to buy a boat?

Most lenders prefer a credit score of 680 or higher. This score gives you better interest rates and a higher chance of approval. If your score is lower, you may still qualify, but expect higher interest rates or a larger required down payment.

What are typical terms for boat financing?

Boat loans usually come with boat loan term options ranging from 2 to 20 years, depending on:

• The loan amount
• New or used boat
• Lender’s policies

Shorter loan terms have higher monthly payments but lower total interest. Longer terms give you lower monthly payments but can cost more in interest over time.