Everything You Need to Know About Boat Loans

Buying a boat is a big financial commitment but that doesn’t mean that it isn’t a real possibility for you. In previous times, only multi-millionaires were able to afford their own boat but this is no longer the case with the availability of boat loans. Few people have the cash to buy a boat outright and so a boat loan can be the ideal solution. The process to calculate your boat loan is actually relatively straightforward as long as you can prove you earn enough money and can be relied upon to repay the loan. 

Boats are very much accessible nowadays with a wide variety of options to choose from. Companies like Boatsforsale.co.uk offer a wide range of options for every purpose and budget. With boats to suit practically any budget here is everything you need to know about securing a boat loan.

1. Work Out Your Credit Score Before Applying for a Loan

In order to qualify for a boat loan, you will first need to work out your credit score to show to potential lenders. Of all the marine financing options, a boat loan is the one that you will really need to have your ducks in a row before you even make the application. These are the main credit bureaus that are considered by boat loan providers. They are Experia, Equifax, and TransUnion. You will need to provide your credit scores from these bureaus so that they can decide whether you are a suitable lender. Each of the three bureaus uses a different formula for working out your credit score so they are often different for each. Due to the differences in score, boat loan lenders tend to focus on the underlying factors which have contributed to the credit score such as your borrowing history, revolving debt, and other factors which show how reliable a lender you are.

2. Improve Your Credit Rating if Necessary

If the boat loan lenders don’t like what they see in your credit reports, you may well be rejected for the loan. If this happens, that doesn’t necessarily mean that your chances of buying a boat are gone forever. You may need to take the necessary steps to improve your credit record to show to lenders that you are working on it. If you can prove that you will now be a responsible borrower, even if your credit history is not great, the lender may decide that you are now ready for a loan and that their money will be safe. If you have still not quite done enough, they may at least be able to advise you on what else you need to do in order to become eligible for the loan. 

3. Secure Other Loans or a Co-Signer 

One of the most effective ways to improve the health of your credit report is to secure other loans and then pay them back in a responsible fashion. Mortgages and car loans work in a similar way to boat loans so if you can prove that you pay those back in a timely and efficient way, this can help to improve your credit reports and increase your chances of securing a boat loan. The other option is to find a co-signer or guarantor who will be responsible for the repayments if you fail to make them. Southeast Financial will guide you through this process.

4. Work Out Your Debt to Income Ratio to Show to a Lender

After a boat loan lender has approved your credit report, you will need to work out your DTI (debt to income ratio). This is calculated by dividing your monthly debt by your gross monthly income. The resulting number will be a percentage and if your DTI ratio is less than 50%, you are likely to be eligible for a boat loan.

5. Make Sure You can Afford the Monthly Boat Payments

It is very important to remember that when your DTI is being calculated, the potential repayments are added to your monthly debt. This means that if the repayments are too high, your DTI could be pushed over 50% which will make you ineligible. Make sure you budget correctly so that you are approved for the loan. If your financial situation changes after you buy the boat, you may be able to refinance the boat to free up some money.



Purchasing your own boat is no longer just a possibility for the ultra-rich. As long as your credit score and monthly income are in order, you will be able to secure a boat loan to buy the vessel of your dreams. Make sure that you stick to your budget and that you are able to pay the monthly loan installments and you will soon be heading towards the horizon with the waves lapping at the hull of your brand new boat.