Estimate your monthly boat loan payment. Calculate payments, interest, and total cost for your marine financing.
Boat loans are typically fixed-rate installment loans similar to auto loans, where you make equal monthly payments over a set term. Each payment consists of both principal (the amount borrowed) and interest (the cost of borrowing).
Unlike home loans, boat loans are secured by the vessel itself, which means the boat serves as collateral. This typically results in lower interest rates compared to unsecured personal loans, but higher rates than home mortgages.
Most marine lenders offer terms from 5 to 25 years, with longer terms resulting in lower monthly payments but higher total interest costs. The loan-to-value ratio (LTV) is usually capped at 80-90%, requiring a down payment of 10-20%.
Boat loan interest rates depend on several key factors:
Typical APR Ranges: 4.5% - 12% for new boats, 5.5% - 15% for used boats, with rates varying based on creditworthiness and loan terms.
Learn more about boat financing and marine loans from these authoritative sources:
Tip: Don't forget to budget for insurance, storage, maintenance, and fuel — these ongoing costs can add 10-15% of the boat's value annually.
Marine industry professionals use what's known as the "1/10 Rule" — a rule of thumb stating that annual operating costs for a boat typically equal about 10% of the purchase price. That figure doesn't include the loan payment itself.
For a $50,000 boat financed over 15 years at 7% APR with $10,000 down:
The operating costs can easily exceed the loan payment itself, a fact that catches many first-time boat buyers off guard.
Depreciation factor: Powerboats typically lose 15–20% of their value in the first year and 5–8% annually after that — faster than cars. A $50,000 new boat may be worth only $35,000 after three years, which means borrowers with small down payments risk being "underwater" on the loan.