Yacht Financing: How to Get a Marine Loan

Most yacht buyers finance at least part of their purchase. Marine loans work differently from car loans or mortgages.

How marine loans differ

Marine loans typically have: - Loan terms of 10-20 years - Down payments of 10-20% - Interest rates 1-3% higher than mortgage rates - Stricter credit requirements - Lender insurance requirements

Loan amounts

Most marine lenders work in three brackets: - Under $100,000 — simple loans, fast approval - $100,000-$1 million — standard marine loans - Over $1 million — large-vessel financing, more complex

What lenders require

• Credit score of 680+ (better rates above 720)
• Debt-to-income ratio under 40%
• Two years of tax returns
• Bank statements (3-6 months)
• Marine survey for vessels over a certain value
• Proof of insurance before closing

Typical interest rates

Rates vary by credit score, loan size, and vessel age. As a rough guide: - Excellent credit (740+): bank prime + 1-2% - Good credit (680-740): bank prime + 2-4% - Fair credit (620-680): bank prime + 4-6%

Newer vessels get better rates than older ones. Vessels over 15 years old often face stricter terms.

Marine lender vs traditional bank

Marine lenders specialise in boat loans and understand the asset. Banks may offer slightly lower rates but require more documentation and may not finance older vessels at all.

Pre-approval

Get pre-approved before you start shopping. It tells you your real budget and makes you a stronger buyer when you find a yacht.

Charter income for offset

If you plan to charter the yacht, some lenders will factor projected charter income into your debt-to-income ratio. Bring projections from a charter management company.

Tax considerations

In some jurisdictions, a yacht can qualify as a second home for mortgage interest deduction. Speak with a tax professional — rules vary by country and state.