Boat Loans

The financing of a new boat can be for 10 years or more depending on the type and purchase price of a boat. For more expensive boats loans for 15 year or even 20 year are not uncommon.

When you finance a boat for 10 to 20 years, it is basically no difference than a home mortgage.

For a used boat the options are a little different, concerning the term length, which is shorter, and sometimes also the interest rate. When you are about to finance a used boat you need a so called "Marine Survey" dome by a boat surveyor who will estimate the value of the boat. The cost of a "Marine Survey" varies between $10 and $20 per foot.

Seven boat loan tips:

Tip 1: Check the current loan rates and compare them at three or four different banks or loan companies. Also try to check the rates online, at the boat dealer itself and even home mortgage lenders.

Tip 2: Try to get a pre-approval for a boat loan as you will know exactly what the maximum is that you can spend.

Tip 3: If home mortgage rates are lower that boat loan rates, you might consider taking a (second) home mortgage to finance the purchase of your boat.

Tip 4: When refinancing a boat, be careful for rates that look to good to be true as some boat finance companies offer very low rates, but will charge very high loan fees.

Tip 5: Only go with professional and reputable loan companies. Professional companies have their good name to loose.

Tip 6: Boat loans can have some tax advantages over paying cash for your boat. Make sure that you check a tax advisor about this as the use of a boat must meet some criteria for deduction of your interest.

Tip 7: When your boat is made for (semi) permanent living, you have to know that a second home interest tax deduction for the interest paid on boat loans is the main tax deduction for recreational boating. Permanent living on the boat itself is not required, all that is required is a sleeping area, a head and some form of galley. Also the IRS requires some proof or indication that the boat owner stays on the boat at least 14 days a year.