If you’re looking to purchase a boat and are in need of finance, there are a range of boat loans available for you to consider. Marine finance options can help you buy a new or used boat through a commercial or private sale. Loans are also available for business purchases. Find out all you need to know in this guide.
How does a boat loan work?
A boat loan can be a secured personal loan that lenders design specifically finance a boat; a more general secured loan that allows you to use a boat as the guarantee, or it can be an unsecured personal loan. If you’re looking for a competitive rate, you may want to consider using the boat as security for the loan.
Boats are expensive, so you will find these loans offer more substantial amounts and may give you a longer repayment term. Depending on the lender, there may be a balloon payment at the end of the loan term.
* The personal loan offers compared on this page are chosen from a range of personal loans finder.com/nz has access to track details from and is not representative of all the products available for comparison in the market. Products are displayed in no particular order or ranking. The use of terms ‘Best’ and ‘Top’ are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing personal loans.How you can compare boat loans
Finding the right finance for your boat is crucial. When you compare your options, keep the following questions in mind:
- What is the interest rate?
The interest rate for this type of loan varies depending on the provider, but rates for secured loans are generally lower. Make sure you select a loan with a competitive interest rate that helps you save money in the long run. - Are there fixed repayments?
Some boat loans offer fixed repayments. You need to think about whether you want fixed repayments, so they stay the same throughout the loan term, or if you prefer a variable loan to take advantage of market fluctuations. - What is the loan’s maximum limit?
The maximum limit of your boat loan also varies with providers. Have in mind a rough estimate of how much money you need to borrow and find a loan that meets these needs. It’s essential you don’t borrow more money than you require and that you can meet the repayments, so you don’t default. - How long is the loan term?
The loan term tends to be longer with a boat loan, but some may extend only up to five or seven years. It’s vital that you select a term that gives you enough time to pay off the debt. Do your calculations and work out how long it will take to pay off the amount you want to borrow. - Is the loan secured or unsecured?
Boat loans can be secured or unsecured, so you need to consider which one is the better option, so you select a loan that matches your requirements.
How much does a boat cost?
It’s essential you understand the cost of owning a boat before applying for finance.
- The boat. The cost of a boat varies greatly depending on the type you select. You could expect to pay anything from $15,000 to $200,000. Some can even be millions of dollars.
- 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. Operating costs also vary depending on the type of boat you choose and how you use it.
- Boat maintenance. The older your boat and the less maintenance you do yourself, the higher upkeep costs. For example, you can help by washing the hull with fresh water after taking your boat out to sea.
- Storage. Whether you store the boat in a high-cost area and also its length determines mooring fees. For example, a mooring suitable for a 12-metre boat at Bucklands Beach, Manukau City will cost NZD$60 a week.
- Boat insurance. Depending on the type of boat you have and where you store it, eg. a trailer boat worth $50,000 costs around $520 per year to insure.
What types of boats can you finance?
- Bass boats. A small boat designed to fish bass or other panfish. It comes with features such as swivel chairs, storage bins for fishing equipment and a live well to store the fish you might catch.
- Bowriders. So-called because of their roomy bow area, this is a boat ideal for skis and wakeboards.
- Cabin cruisers. 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.
- Catamarans. Known as “cats”, these boats come with two hulls. They can be small vessels designed for sailing and fishing, right up to naval ships.
- Centre consoles. These boats are made for fishing adventures. You typically find a bait well as standard, plus fish lockers and a cabin.
- Cuddy cabins. Primarily used for fishing, watersports and other family boating activities, the cuddy refers to a small room or cupboard.
- Dinghies. These small boats can be towed by a larger boat into shallow waters or used for fishing in calm water.
- Game boats. 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.
- Houseboats. This vessel is used primarily as a home, whether for vacationers or permanent dwellers. They may not be motorised because they’re often kept moored at a specific location,
- Motor yachts. Designed for ocean cruising, you’ll find various amenities on this boat. Sleeping berths, air conditioning, plumbing and galleys are standard.
- Runabouts. A smaller boat designed for tow sports or fishing, you don’t usually find a cabin on a runabout.
- Sailboats. A “sailboat” can refer to various types of sailing craft, but the common feature is their reliance on the wind for movement.
- Ski and wakeboard boats. 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 waterskiing jumps and tricks.
- Trawlers. You can use a trawler for commercial fishing or recreation, but there is a distinction between the two. Fishing trawlers always have a displacement hull, but on trawlers designed for recreation, you only find a semi-displacement hull.
- Walkarounds. So-called because you can walk completely around to any point on the boat, these medium-sized boats come with stowaway seating and a central cabin.
What are the benefits and drawbacks of financing a boat purchase?
- Specialised loans. While some conventional secured personal loans allow you to use boats as security, there are other loan options available that are specially designed to finance a boat.
- You could get fast approval. Boat loans usually have a quick turnaround time once you complete the online application. The application process is relatively straightforward, and you may have the finance for your boat in no time. Some providers even offer automatic approval for loans under a specific limit, so that you can receive approval even quicker.
- Access to competitive interest rates. Some boat loans have competitive interest rates available, which tend to be lower than other credit options. If you know that you specifically need finance for a vessel, a boat loan is a great way to save money potentially.
- Large loan amounts are required. Boats are expensive, and that translates to a more substantial loan amount. Make sure you choose a term that keeps your repayments manageable.
- You typically can’t factor additional costs into a secured boat loan. You need to consider ongoing boat maintenance; boat insurance; marine equipment and storage fees on top of the cost of the boat.
Is there anything to avoid with boat loans?
- Unlicensed credit providers.
Signing up for a loan with an unlicensed provider is a dangerous mistake. If you think the lender is behaving in an unscrupulous manner or has misled you, contact the Financial Markets Authority (FMA) complaints line on 0800 434 566. - Ending up in a spiral of debt.
Getting buried in debt can be an easy thing to do once you start borrowing money, especially if it’s from a range of providers. Make sure you know your limit and seek help if you are having trouble with the debt, eg making repayments.
How to apply for boat loans
You can apply for boat loans by comparing with finder.com/nz. All you have to do is check out the comparison table on this page and look at the alternatives. Once you select an option that is right for you, click “Go to Site” to start the application process.
To apply for a boat loan, you have to be 18 years or older. You may also need a good credit rating and be able to provide details about your current financial position, including bank statements or employment details. The application is usually straightforward to complete.
Don’t want a boat, but want a jet-ski? Find out more about a range of jet-ski loans.
