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Boat Financing 101: Everything You Need to Know About Boat and Marine Loans

May 28, 2021 | Blog, Financing

Canada is filled with many great lakes where you can enjoy the view and just have a good time with your friends or family. However, the best way to enjoy a lake is by getting your own boat, which you can use to sail wherever you fancy. Getting a boat is actually a lot simpler than you think. Like any other vehicle, boat financing will require some paperwork, but it’s easy enough for anyone to do. It’s no different than getting a new car. If you’re interested in getting one for yourself, here’s what you need to do.

Choosing the Right Boat

Buying a boat is very much like investing in a new car. You need to know what kind of boat you want and what features you need. Large powerboats, sailboats, and speedboats are some of the most popular options out there. When considering what boat to buy, you should consider the following:

  • What’s your purpose for getting the boat? Is it for fishing, watersports, sailing, day cruising, overnight cruising, or multi-use?
  • How many people are you planning to put in your boat?
  • How big does it have to be to fit your needs?
  • What type of engine do you need for your boat? You can have outboard, sterndrive, jet, sail, or human-powered.
  • Do you need to be able to move your boat around on dry land? If so, you might want to get a trailerable boat.
  • How much are you willing to spend?

Financing Options

Knowing what you want and need from a boat is the first step. Next is you need to decide how you’re going to finance your boat. Do you have the cash to buy one up front, or do you need to look for some loan options? Boat loans are widely available and are surprisingly affordable. Whether you plan to get a new or used boat, there are a few boat financing options available with their own benefits and drawbacks.

  • Secured Loans – A secured personal loan for your boat is backed by collateral. If you default on a loan, the lender can take the collateral as a form of repayment. Whenever you get an auto loan, the lender can repossess the car if you default on your payment. The same goes for boat financing, where the boat acts as the collateral.
  • Unsecured Loans – There are also boat financing options that don’t involve collateral, which is safe for you if you’d prefer not to lose your boat in the event of a default. However, unsecured loans such as this have higher interest rates with loan conditions that are less favourable to you in exchange for not having collateral. So, if you’re going to apply for a large unsecured boat and marine loan, it’s best to do it when you have a good income, a decent credit score, and otherwise healthy finances.
  • Second Mortgage – If you don’t want to take out a personal loan, there’s always a home equity loan, which is a type of second mortgage that uses your house as collateral for your boat loan. This is more of a last resort option as the stakes are pretty high in this type of loan. Unless you’re 100% sure you can pay off your loan to completion, avoid getting a home equity loan.

Conclusion

Buying a boat that you can use to sail across the great lakes of Canada is an investment like no other. Like any other worthwhile investment, you need to find the right boat and the right type of loan for you. That way, you can enjoy going on boat trips without worrying about anything.

Making the adventure of a lifetime a reality is now more possible than ever with the help of Canada Powersports Financing. We provide loan options for snowmobiles, ATVs, Jet Skis, and more! With the help of some of the most reputable lending institutions in the country, we can get you the best deals for your loan. Whether you need a snowmobile, RV, or boat financing, contact us to apply for a loan!

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