There is no minimum credit score for a boat loan, but we recommend that you apply with a 680 and above.
Don’t let financing blow you out of the water because you don’t understand the lending process. If you apply with a 680 FICO score or above you will have ample boat loan options.
The Pros and Cons of Boat Financing
- You’ll have predictable monthly payment amounts (with fixed-rate loans)
- You’ll know exactly how long it will take to pay off the loan
- So long as you make on-time payments, financing can help build credit
- The boat can be used as loan collateral
- Variable interest rate loans can blindside your budget
- Unsecured loans may cost more than those using a boat or home as collateral
- Subprime boat loans can carry double-digit interest rates
- Loan payments can tie up cash reserves
Steps For Getting A Boat Loan
Getting a boat loan is similar to getting an auto loan. Here’s what you need to know about the process.
1. Check your credit score. Before you apply for any type of loan, you should always check your credit score. Pull your most recent FICO score from at least one — preferably all three — of the major credit bureaus — Experian, Equifax, and TransUnion. (You can also check two of your credit scores for free through Credit.com.)
Check your credit reports for any mistakes, and have them corrected as soon as possible. Even minor issues can stall the loan process, or sink your credit score.
If your score is lower than what the lenders require to give you a good rate (it can vary by lender; do your research before you apply) take a few months to bring it up before applying for a boat loan. A higher score will give you a better chance of approval and will save you money by landing you a lower interest rate.
(Over the life of a 3-5+ year loan, even a 1% APR reduction can make a huge impact!)
2. Start shopping around. If you’re unfamiliar with the boat market, take time to shop around a bit. Get a feel for prices in your area so that you know how much money you need to ask for.
3. Know how much you can afford. If you make $30,000 a year, you shouldn’t go buy a $100,000 boat – even if someone will loan you that much money. Because a boat is purely for pleasure, you certainly don’t want to get in over your head. So shop for a boat with a reasonable total price and monthly payment, based on your income.
4. Shop for a loan. Don’t just go with the first lender who approves you for a boat loan. Instead, shop with at least three lenders. You may want to get a variety — a national bank, a P2P lending service, and a boat dealer, for instance. Compare the loans’ terms and interest rates before choosing the loan that works best for you. Keep in mind, though, that each time you apply for credit, you’ll get a ding on your credit score.
5. Go buy a boat. Once you’ve settled on the best loan for your needs, you can buy your boat. Just be sure you stick to your affordability limits, and that you pay a decent down payment on your new (or new-to-you) pleasure boat.
According to SeaDream.com:
What is the minimum credit score for a boat loan?
Although it is sometimes possible to qualify for a boat loan with FICO credit scores in the 500s, generally you will need 600+ along with a low debt to income ratio to qualify.
If you think you qualify you can apply for a loan online today.
How Much Do You Need To Improve Your Score?
Want Help Removing Items Off Your Credit Report?
Good Luck Moving Forward
Although there is no minimum credit score for a boat loan, we suggest you have a 680 and above to get favorable loan terms and interest rates.
So, if you have time, you should improve your score if it’s lower than 650.