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Cassive · 19-08-2008, 18:33

I'm wondering, what's a typical term on a boat loan and what's a fair amount to put down as a percentage of the total price? I'm looking to purchase a boat to use as a liveaboard and spend roughly 2 1/2 years preparing it for long-distance cruising while I wait to get out of the military. I know lending institutions drop the rate on longer term loans, but I don't want to get in over my head. Just trying to figure out how much I can afford so that I can begin searching within a set price range.

svcattales · 19-08-2008, 19:40

I've had two boat loans plus a refinance on one of them, but I'm not an expert by any means. Our last loan was in 2005 so things may have changed greatly since the recent "credit crunch." Now that the disclaimers are out of the way, here are my experiences:

- I found boat shows to be a good place to shop for loans. Sometimes they offer better rates during a show.

- When I shopped, most lenders wanted 20% down. Since boats can depreciate quickly I think its a good idea to make a large downpayment to avoid being "upside-down" on the loan. Also since you intend to start cruising in a few years, lower boat payments will keep your "cruising kitty" healthier.

- Loan terms tend to be 10 or 15 yrs, but some lenders may go to 20. I would expect longer terms to be a higher interest rate than shorter, but my most recent loan the 20yr was the same interest as the 15yr.

Your personal finances will have to determine what type of loan you can handle. Since you will be fitting out the boat for cruising, you need to plan for a significant chunk of change even if the boat is listed as a "turn key long distance cruiser." You will want to make numerous upgrades which can put a big dent in the budget. Suggest you make a list of "needs" and "nice-to-haves" and price them out before you go boat shopping. Then you will have a means to compare "apples to oranges" when looking at well equipped vs lightly equipped vessels. Other things being equal, a well equipped boat can save you lots of money on a used boat since you are not paying full price on the extra gear. On the other hand, used gear can increase your maintenance costs so you have to consider that in your cruising budget.

Good luck on your boat & loan shopping.

speciald@ocens. · 19-08-2008, 19:43

New or used? Typical length is 15 years. Down payment is sure to have increased due to changes in lending. Probably 20%.

bstreep · 19-08-2008, 23:34

20% down. 20 years for a big boat is about the max. Interest rates tend to be a tiny bit higher than mortagage rates, but this depends upon your credit, I'm sure.

We had a GREAT experience with Essex Credit: 866.377.3948 - Donna Ryan. They know the ins/outs of boat finance and purchase, and really, really made it a simple, smooth transaction. Great rates too. Obviously, I have no financial interest here, just that they did a great job for us.

Bill Streep

Tempest245 · 20-08-2008, 05:46

Essex Credit did a great job for me as well. 20 down, 15 year loan. I believe it was 6%.

Chantyabc · 27-08-2008, 10:33

Eboatloans did an awesome job 20Year Term 6.50%...They do livaboards too.. It was really hard finding someone to do that...
954-847-1540 is the Girls #

cabo_sailor · 27-08-2008, 11:19

The mention of liveaboards reminds me. Some institutions will not loan to a liveaboard. My loan, which was arranged through Essex, is with Bank of America and they were adamant to the point that they required a signed statement that I was not going to liveaboard.

goshea · 10-09-2008, 14:31

Good article here: Cruising Cats USA - Finance

amos12 · 25-11-2008, 23:37

Well Cassive, take a look at http://ww.militaryloans.com . They specialize in loans for military personnel. If you want to know more just login to their site and get more information. I hope this helps.

Liberty28 · 26-11-2008, 04:16

Whomever gives you a loan is going to want the boat insured for at least the loan amount. One more additional cost to consider as part of the boat payment.

night0wl · 26-11-2008, 20:26

Just worked with newcoast finanial...cindy there is very detail oriented. 6.99 for 20 years, 20% down. Its high, but the boat deal was good and Cindy is going to look to refinance as this debt mess settles down.

Sparks · 04-03-2010, 07:24

Cassive - I am looking around for my first boat now and I was wondering what your experience was getting the boat loan? What terms did you end up getting?
Cheers,
Sparks

**Dockhead** · 27-10-2011, 07:41

If your down payment is not 20%, but 100%, then your interest rate falls to zero and your term will be infinite. Something to think about . . .

offline · 27-10-2011, 08:24

I have been dealing with this recently and have some current info.

If the boat is older than 20 years, good luck, not many lenders out there and most will only finance 80-90% of the lower BUC value. You will likely be needing 20% or more in some cases. Term for older boats is 10-12 years.

Otherwise you can do 15-20% down and a 15-20 year term if you have good credit.

Don't use it as a live aboard, you need to have a permanent land based address for these loans.