If you’re looking to purchase a boat but need a little help covering the costs, there are many different boat financing options available for you to consider. Keep reading our guide to learn how to find the best boat loan for your financial situation.
Enter the amount you need to borrow for your boat loan (the cost of the boat including any taxes and fees) under Loan amount.
Write the loan term in years (not months) under Loan terms.
Enter the loan’s interest rate if there are no fees under Interest rate. Otherwise, write the annual percentage rate (APR), which includes interest and fees.
Hit Calculate.
Review your results.
How does boat financing work?
Boat financing can usually be one of the following:
A secured loan that is designed to specifically finance a boat.
A more general secured personal loan that allows boats to be used as collateral.
An unsecured personal loan with no collateral.
Boats can be expensive, so you will find these loans offer larger loan amounts and may give you longer repayment terms than loans used for other purposes. If you’re looking for a competitive interest rate, you may want to consider using the boat as security for the loan.
Where to get boat financing in Canada
It depends on the type of loan you’re looking for, but in general, some of the most common places to find boat financing include boat dealers, banks, credit unions and online lenders.
Many boat dealers offer financing options to its customers. The perks to financing your boat directly through the boat dealer are primarily that it’s convenient and often easier to qualify for. Still, it’s always a good idea to first shop around for the best rate for your financial situation by getting multiple quotes from different lenders before signing on to boat dealer financing.
Banks and credit unions are solid options for borrowers with strong credit scores. They usually offer some of the lowest interest rates, but the application process is more involved. Banks and credit unions may be able to offer either boat-specific financing, often called a marine loan, or a personal loan to finance your boat. Your best bet is to talk directly with a representative to discuss your options before deciding what to apply for.
Scotiabank, TD and RBC are examples of banks who offer marine financing. Keep in mind that you may need to become a member of a credit union before you can apply to get a loan.
Online lenders include either personal loan lenders or vehicle financing specialists. You generally don’t need to submit as many documents, you can fill out the loan application in just minutes and you can usually expect to receive an approval decision within the day. However, online lenders tend to offer higher interest rates. They may be your best bet if you have bad credit – or no credit at all – as they have more flexible eligibility requirements. Compare online lenders.
How much can I borrow to finance a boat?
How much you can borrow for boat financing generally depends on the price of your boat and is typically between 90% and 100% of the boat’s cost. Minimum loan amounts can start anywhere from $500 to $50,000 or more, depending on the lender.
Don’t forget the down payment
Like car loans and mortgages, always consider putting a down payment on your boat. Lenders tend to favor applicants that can front at least 20% of the boat’s cost. To avoid over-borrowing, we recommend saving up as much as you can for a down payment so you don’t need to borrow as much to finance your boat. The less you borrow, the less interest you’ll pay.
Remember: Boats are more like cars than houses. Your vessel will begin to depreciate as soon as you buy it. If you borrow a large amount with a lengthy term, at some point you may end up owing more than the boat is actually worth.
Representative example: Boat financing in Ontario
Barbara lives in Ontario and wants to buy a boat to keep at her cottage in Muskoka. Her neighbour is selling a used Angler boat for just $15,000.00 – which is an absolute bargain in Barb’s eyes. Barbara only has $7,000.00 on hand to spend on a boat at the moment, but she doesn’t want to pass up on the opportunity, so she decides to look into options for boat financing in Ontario for the remaining $8,000.00.
Barb has an excellent credit score, so she compares both traditional and non-traditional lenders. She finds that her bank offers the lowest rate and best terms, where she will be approved for a personal loan of $8,000.00 with a 5.00% APR and a 2 year loan term.
Cost of used boat
$15,000.00
Loan type
Personal loan
Loan amount
$8,000.00
Interest rate (APR)
5.00%
Loan term
2 years
Additional fees
Origination fee of 3% ($240.00)
Monthly payment
$350.97
Total loan cost
$8,663.31
*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.
How can I compare boat financing options?
Finding the right financing for your boat is important. When you’re comparing your loan options, keep the following questions in mind:
What is the interest rate? The interest rate for a boat financing varies depending on the provider you choose, but rates for secured loans are generally lower. Make sure you select a loan with a competitive interest rate that will help you save money in the long run.
Are there fixed repayments? Some boat loans offer fixed repayments. It’s important to think about whether you want fixed repayments or if you prefer a variable rate loan to take advantage of market fluctuations.
What is the loan limit? The maximum amount of boat financing you’re approved for also varies with providers. Have in mind a rough estimate of how much money you need to borrow and find a boat loan that meets these needs. Don’t borrow more money than you actually need since you’ll pay interest on the amount borrowed.
How long will your loan term be? Choose your loan term by figuring out how much you can afford to repay each month. Do your calculations using the boat loan calculator above to figure out how long it’ll take to pay off the amount you want to borrow with the annual percentage interest rate (APR) you might qualify for.
Is the loan secured or unsecured? Boat loans can be secured or unsecured, so consider which loan type better suits your financial situation. A secured loan is risky since you can lose the collateral – which could be your boat – if you don’t make your repayments. However, you can usually get a lower interest rate than with a secured loan.
What kinds of boat financing rates and terms can I expect?
If you’re looking at a secured personal loan, rates typically start around 2%, while unsecured loans can be slightly higher around 5%+. Keep in mind that these are starting rates and some lenders will charge upwards of 30%, depending on your credit score and other factors. For borrowers with a good to excellent credit score of 660+, rates will likely sit around the 7-12% mark.
Personal loans usually come with offer terms from one to either five or seven years. However if the boat is worth a lot, you may find terms much higher. Remember that a longer loan term will mean you pay much more in interest.
What are the benefits and drawbacks of financing a boat purchase?
Pros
Specialized loans. While some loans are standard secured personal loans that allow boats as security, there are other options available that are specially designed to finance a boat, often called marine loans. Marine and boat loans often come with ideal loan amount and term lengths for boat purchases.
You could get fast loan approval. Loans usually have a quick turnaround time once you complete the online application. The application process is relatively easy and you can have the finances for your boat within one to ten business days.
Access to competitive interest rates. If you shop around for a lender that fits your financial situation, you can score a competitive interest rate. Banks tend to offer some of the lowest rates. Securing your loan with the boat can also often help lower your interest rate.
Cons
Large loan amounts are required. Boats are usually quite expensive and that translates to a larger loan amount. The more you take out to finance your boat, the more you have to pay back and the more interest you’ll be charged. Make sure you choose a term that keeps your monthly repayments affordable.
Can’t use a secured boat loan for costs other than the boat itself. You need to consider ongoing boat costs including maintenance, boat insurance, marine equipment and storage fees. These costs usually cannot be added to a secured loan since the loan is usually only issued to exclusively cover the cost of the boat.
How to apply for boat financing
Once you’ve compared a variety of lenders offering boat financing, head to the specific lenders website to begin your secure online application. Some lenders may additionally allow you to apply over the phone or in person if they have physical stores. You will need to make sure you meet the eligibility criteria and have the necessary documents on hand to apply. The process usually takes less than ten minutes.
Eligibility requirements for boat financing
These may vary from lender to lender, however you will usually need to:
Be 18 years of age, or the age of majority in your province or territory
Be a Canadian citizen or a permanent resident with a valid Canadian address
Have proof of an income
Meet any credit score requirements
Have a working bank account
Meet any income requirements
Required documents
You will need the following documents on hand when applying for boat financing in Canada:
Personal details like your name, address, Social Insurance Number (SIN), phone number and email.
Income details including pay stubs or bank statements.
Employment details including your employer’s name and contact details.
Banking information like your bank’s name, address and transit number, as well as your personal bank account number.
What do boat financing lenders look for in a borrower?
Making yourself a good candidate for boat financing providers will go a long way in helping you get a low-cost loan for your marine purchase.
Steady source of income. You need to show you have enough regular income to afford monthly repayments after other bill and debt obligations.
Low debt-to-income ratio. You’ll need to have a low debt-to-income ratio. Lenders want to make sure you won’t be overextending yourself — and putting yourself at risk of default — when you finance a boat.
Liquid assets. Lenders often want to see that you can still handle payments should your employment or income situation change drastically.
Good to excellent credit. Lenders look for borrowers with good to excellent credit because it shows a history of paying your bills on time and managing debt responsibly.
Experienced boat owner. Experience with a boat isn’t a must, but it may make a lender more confident. Having had a boat in the past means you likely know the ropes.
Is there anything to avoid with boat loans?
Before applying for boat financing, consider the following:
Unlicensed credit providers. Signing up for a loan with an unlicensed provider is a dangerous mistake. There are plenty of scams operating in the online world, so be sure the lender you choose is legitimate and licensed to operate.
Getting into a debt spiral. Getting buried in debt can be an easy thing to do once you start borrowing money, especially if you have multiple debts. Make sure you know your limits and seek help if you are having trouble with repaying your debt.
Deals that seem too good to be true. If you find a deal online or otherwise that’s in a different league than the competition, do some poking around – it could be the sign of a scam.
What types of boats can I finance?
A small boat that’s designed to fish bass or other panfish. It usually comes with features such as swivel chairs, storage bins for fishing equipment and a live well to store any fish that you might catch.
Called so because of their roomy bow area, this is a boat ideal for water skis and wakeboards.
Similar to a bowrider except for its top cabin, these boats offer creature comforts such as water heaters, power generators and even heaters and air conditioners.
Known as “cats”, these boats can be small vessels designed for sailing and fishing up to naval ships. These boats come with two hulls.
These boats are made for fishing adventures. You’ll usually find a bait well, as well as fish lockers and a cabin.
Cuddy refers to a small room or cupboard on this boat, which is used primarily for fishing, watersports and other family boating activities.
These small boats can be towed by larger boats into shallow waters or as the main boat for fishing in calm water.
Also built for shipping, this is a larger boat that can come equipped with cooking galleys and sleeping berths to make the boat comfortable for longer trips.
This is a type of vessel that’s used primarily as a home, whether for vacationers or permanent dwellers. Many of these are not motorized because they’re kept moored at a specific location.
“Sailboat” can refer to various types of sailing craft, but the common feature is their reliance on the wind for movement.
You won’t usually find a cabin on a runabout, which is a smaller boat designed for tow sports or fishing.
You’ll find various amenities on this boat, which is designed for ocean cruising. Sleeping berths, air conditioning, plumbing and galleys are usually standard.
If you’re looking for a boat for watersports and tow sports, this is the type of vessel for you. The propulsion on these small boats allows for water-skiing jumps and tricks.
You can use a trawler for commercial fishing or recreation, but you’ll see a distinction between the two. Fishing trawlers will always have a displacement hull but you’ll only find a semi-displacement hull on trawlers designed for recreation.
Called such because you can walk the full way around to anywhere on the boat, these medium-sized boats come with stowaway seating and a central cabin.
It’s important to understand the full cost of keeping and using a boat before you apply for boat financing and lock yourself into a big purchase you can’t afford.
The boat purchase. The actual cost of a boat varies greatly depending on which type you select. You could expect to pay anything from $25,000 for a new motorboat and well over $1,000,000 for a new yacht.
Boat equipment. Consider the costs of decking out your boat. Electronics, water toys, accessories and safety equipment could set you back $1,500 or more.
Operating costs. This cost will also vary depending on the type of boat you choose and also how you use it.
Boat maintenance. You will be stuck with a higher maintenance cost the older your boat is and the less you take care of it yourself. You can slow down wear and tear, for instance, by washing the hull with fresh water after taking your boat out.
Storage. Mooring fees are usually calculated by the length of your boat and will increase if you store it in a high traffic area or popular area.
Boat insurance. Depending on the type of boat you have and where you store it, insurance can cost anywhere from $300 to $500 usually. Keep in mind you may not need insurance in your province or territory, however the marina you store your boat at may require you to have insurance.
Compare boat loans
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How else can I pay for a boat?
If you can’t find a boat financing option that works for you, or would rather not use your boat as collateral, you might want to consider these alternatives:
Leisure vehicle loans. Some lenders offer leisure vehicle loans that cover a wide range of vehicles — from jet skis to RVs — and include boats.
Save up. Not in a rush? Saving up is the cheapest way to buy a boat, since you won’t have to pay any interest or fees.
Rent a boat. Many companies set up shop along popular lakes and rivers to offer boat rental options. Renting a boat for a day or weekend will be much cheaper than financing and paying the many ongoing costs of owning one yourself.
Find a boat club. Boat clubs give you access to fleets of boats in exchange for a monthly or annual payment — and you won’t have to foot the bill for insurance and maintenance
Frequently asked questions about boat financing
Typical insurance rates for boats sit between $300 to $500 a year. However, rates may be higher or lower depending on specific factors like the province or territory you are in, the body of water your boat is in and how often you use it throughout the year. Boat insurance is not mandatory in all provinces and territories.
Boat registration is not required in Canada, however there are benefits to registering your boat. If you decide to register your boat, you will receive features such as proof of ownership, a boat number, a unique name and the right to fly the Canadian flag, among others.
Yes, it’s federal law that when operating a powered water craft you must have – and carry on you – your boating licence. Licence costs and course lengths vary between provinces and territories. You can get a license online or in person at specified locations by completing a multiple choice test. You must achieve at least 75% in order to pass and receive your boating licence.
Leanne Escobal is a publisher for Finder. She has over 11 years of experience in financial services, specializing in content and marketing. Leanne has completed the Canadian securities course (CSC®) as well as the personal lending and mortgages course by the Canadian Securities Institute. She has a Bachelor of Arts (Honours) in English literature and creative writing from Western University.
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