Boat loans are not that much different from a car or home loan, though the terms do have some dissimilarities. This often leads to people wondering about boat loan terms. How long can you finance a boat? Turns out there are a number of factors influencing how long you get to pay the lending institution back. If you want to secure the best boat loan terms, here is what you need to know.

How Long Can You Finance a Boat?

Historically, a boat loan lasts between 12 months to 20 years, depending on the kind of loan you select and your lender. For instance, if you take out a home equity loan to purchase a boat, you may have a longer repayment period than someone with a secured loan directly from the dealership.

That said, on average, you can finance a boat for 2 to 15 years. Some will finance a boat for 20 years, which brings the monthly payment down substantially.

Can I Choose a Shorter Loan?

Yes, you can choose a shorter repayment period. Most banks and credit unions are more than willing to shorten the repayment period, because they want their money back as quickly as possible, thereby minimizing risk. Therefore, if you want to limit the amount of interest you are paying on your boat, consider a shorter loan.

Factors Affecting Boat Loan Terms

The boat loan term is not solely dependent on the amount and the time you select. Some other factors include:

Boat Loan Size

As a general rule of thumb with any kind of loan, the bigger the purchase, the longer you get to pay it back. Most lenders have a minimum and maximum amount they are willing to lend for a boat.

How Boat Financing Works

A boat loan works like most loans: You receive a set amount of money from a lending organization for a big purchase. Your credit score determines how much you can receive and the repayment terms. For example, perfect credit (781+) means you get the best interest rates and require the lowest down payment on your new vessel. Meanwhile, poor credit (580 and below) greatly reduces your chances of securing a loan, and you will need to provide a large down payment. Other factors aside from your credit score may also affect your approval amount and terms, such as liquidity, as well as debt to income ratio.

The length of the repayment period and interest rate are influenced on the boat make and model, as well. In that light, boat loans and auto loans are similar.

The Type of Boat

While most modern vessels can be lumped together under the same classification, there are some types that financial institutions see differently. This includes:

  • Sailboats, multi-hull boats, and pontoon boats
  • High performance boats
  • Wooden hull ships
  • Houseboats and liveaboards

If you are trying to get a boat loan for any of these, you may have to shop around a bit. This is mostly true for houseboats, due to residency laws throughout the country. Most lenders will refuse to give you a boat loan for a boat you want to live upon.

Used or New Boat

If you are buying a used boat, there may be some additional restrictions from the lender. The older the boat, the shorter the loan. Typically lenders will not finance a boat more than 20 years old. The opposite is true for newer boats. Indeed, many lenders out there will cap the age of a boat they consider for loans. Others will refuse anything but a brand new boat.

Buying used also means that some loan requirements change. For example, your lender might have different interest rates or a minimum loan amount for boats built past a certain year


Despite being an investment, boats tend to depreciate in value swiftly. In fact, a new model can depreciate as much as 20% within the first year of purchase. This is one of the reasons why many lenders want to secure a shorter loan term with you.

If you want to combat depreciation, consider making a large down payment. The more you put down, the more money you could make back when you decide to sell your boat. Plus, a greater down payment means a higher chance of approval for your boating loan.

Let Us Find You a Boat

How long can you finance a boat? Generally between 2-15 years. The newer the boat, the more leniency you get with repayment periods. Choose the one that is best for you, so you can sail away without any worries.

Whether you are buying or selling your boat, Yacht Brokers of Annapolis is here to help. We have years of experience working with boat enthusiasts like you. Not only can we give you tips for boat loans, but we can also help you buy and sell a boat more quickly. Why not give us a call today at 410-206-2755 to schedule a consultation?