Guide to Financing a Boat or Yacht

Buying a boat or yacht is a big step, but it might be more doable than you think. The idea of financing can sound intimidating, but the truth is, getting a boat loan isn’t all that different from financing a car or RV. With the right lender, a solid credit profile, and a little prep work, you’ll be sliding behind the wheel — or should we say helm — in no time.

Whether you’re eyeing a brand-new yacht or a well-maintained used vessel, this boat financing guide explains everything from who qualifies for financing to what you’ll need to bring to the table.

Are You Qualified for a Loan?

Before you start comparing loan rates or applying for financing, it’s good to know what lenders are looking for. The good news? If you’ve financed a car or a house before, the checklist is pretty familiar.

Good Credit Score

Most lenders want to see a credit score of 680 or higher, though some may approve lower scores with a higher interest rate or a bigger down payment. A strong credit score tells lenders you’re reliable when it comes to paying bills on time.

Strong Payment History

Financial lenders want to see that you’ve handled previous loans or credit accounts responsibly. No missed payments, no recent bankruptcies, and no red flags.

Positive Income and Net Worth

Your income and existing debts play a big role. Lenders will want to know you can comfortably cover the monthly payments, along with your other financial obligations. Bonus points if you have assets or savings—they show you have a financial cushion.

Financial Lender Options

There’s no one-size-fits-all answer when it comes to who to borrow from. Depending on your credit, the boat you want, and your timeline, you’ve got a few solid routes:

Banks

Major banks offer competitive loan rates and familiar loan terms. If you already have a relationship with a bank, it’s worth checking if they offer any customer perks or flexible rates.

Credit Unions

Credit unions often have lower interest rates than traditional banks, and they may be more flexible with credit requirements. They’re a great option if you’re a member or can join one locally.

Online Lenders

Some online financial platforms specialize in recreational loans. They let you compare rates from multiple lenders quickly, but make sure to read the fine print—some may come with higher fees.

Petzold’s Marine Center

Yep, we can help too! Petzold’s finance team works closely with trusted lenders and financing partners. When you find the boat you love, our team can guide you through the financing process—right from our showroom. 

What Do You Need to Provide to Apply for a Boat Loan?

Getting your paperwork ready ahead of time can really speed things up. Most lenders will ask for the following:

• Recent W-2s or tax returns (for income verification)
• A completed credit application
• Your latest pay stubs
• A co-signer, if needed (for lower credit scores or higher loan amounts)
• The amount you plan to borrow
• The size of your down payment

Having all of this handy upfront helps your lender determine the best loan options for your situation.

Boat Loan Types

The type of loan you choose can affect everything from your interest rate to how flexible your repayment terms are. Here’s a quick look at the most common loan types you’ll run into when purchasing a boat:

Secured Loans

This is the most common option for boat buyers. With a secured loan, the boat itself acts as collateral. That means if you stop making payments, the lender has the right to repossess the boat. Because there’s less risk for the lender, these loans often come with lower interest rates and longer repayment terms—making them a solid choice if you want manageable monthly payments.

Unsecured Loans

An unsecured loan doesn’t require collateral. That means the lender isn’t tying your boat—or any other asset—to the loan. These loans are often based on your creditworthiness and income, which means they typically come with higher interest rates and shorter loan terms. On the flip side, you’ll have a bit more flexibility in how you use the funds, which can be helpful if you’re financing additional costs like gear, trailer, or upgrades.

Home Equity Loans

If you own your home and have built up equity, you might consider using it to finance your boat. A second mortgage allows you to borrow against your home’s value—often at lower interest rates than unsecured loans. Just keep in mind, you’re putting your home on the line, so this option comes with more risk if your financial situation changes.

How to Apply for Boat Financing

Now that you know what lenders want and what documents to prep, here’s how to kick off the process:

1. Find the Boat or Yacht You Want

Browse online or visit our showroom to choose a vessel that fits your needs and budget. Check out our new boats or used inventory.

2. Figure Out How Much You Need to Borrow

Take the price of the boat, subtract your planned down payment, and that’s your target loan amount.

3. Gather Your Documents

Like we mentioned earlier, having your tax forms, pay stubs, and credit info ready will keep things moving.

4. Pre-Qualify If You Can

Getting pre-qualified helps you shop with confidence and compare loan offers more easily. It usually won’t impact your credit score, and it gives you an idea of what interest rate and terms to expect.

5. Submit Your Credit Application

You can do this through your bank, an online lender, or right here at Petzold’s. Our finance team is here to make the process as smooth as possible. 

FAQs

What Happens If My Boat Loan Gets Denied?

Don’t panic. Sometimes it’s just a matter of adjusting the loan amount, improving your credit, or adding a co-signer. Our team can walk you through next steps and even help you reapply.

What Credit Score Do I Need for a Boat Loan?

Most lenders prefer 680 or higher, but there are still options if you’re lower. Just expect higher rates or a bigger down payment.

How Do I Get a Low Interest Rate on My Loan?

Higher credit scores, larger down payments, and shorter loan terms usually lead to better rates. Shopping around and getting pre-qualified helps too.

Can I Finance a Used Boat?

Absolutely. Many lenders finance used boats, especially ones in great condition. Browse our used boats to see what’s available.

Is There a Difference Between a Boat and Yacht Loan?

Yacht loans typically involve higher loan amounts and might have more detailed credit or income requirements. But overall, the process is quite similar.

Got Questions? Talk to Petzold’s Marine Center

If you’re not sure where to start, we’re here to help. Whether you’re shopping for your first boat or upgrading to something bigger, Petzold’s makes the financing process feel easy. Our team will help you compare options, apply for the loan, and get you out on the water—no stress needed. Reach out to our marine experts, today and bring your dream vessel home.