A boat loan is a loan where the boat is used as security. Often with the purchase of a boat, you would sometimes be purchasing a trailer and perhaps an outboard motor with it, these assets may also be used as security over the same loan.
Lender criteria may be slightly different to that of a car loan as a boat may be classed as a ‘recreational product’ or a ‘lifestyle good’ and the lender may view them as a higher risk lend than a car. If the lender is required to repossess the boat and sell to recover their debt, it is not as easy to sell a boat and to sell it at auction or wholesale may incur a larger loss than that of a car.
If the boat is being used for commercial purposes, the loan may be assessed similar to that of a business loan, where the business purpose of the boat would need to be determined and perhaps the lender may want to see a projection of the income the boat will generate to take into consideration the feasibility of the proposal.
The valuing of boats are a little harder than that of a motor vehicle, where most lenders will allow a computerised general valuation of a car in order to assess a finance application, quite often a boat has to be done manually and this will often take more time in regards to an approval.
There is the ability to finance a boat being purchased through licenced boat dealers and also through the sale of a private vendor. There also may be some age restrictions, so it is wise to discuss this with a professional to assist in your decision. Boat loans give you flexibility of term from 12 months to 60 months.