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How Long Can You Finance a Yacht?

Apr 20, 2024 | Boat Loans

Have you been dreaming about cruising around the world? Would you like to head for sunnier climes in your own luxury yacht? Your dream may not be out of reach if you can access the right financing tools.

To get you started, Canada Powersports Financing is here to discuss questions like,  “How long can you finance a yacht?” We’ll look at this and what influences your eligibility for yacht financing.

How Long Can You Finance a Yacht For? 

You can typically finance a yacht for between 10 and 20 years. In some cases, the financier might allow you to stretch the term to 25 years. This depends on the factors that we’ll go through below.

Loan Amounts and Down Payments

If you’re wondering, “How long can you finance a yacht?” it depends on how much you borrow. If you have a 50% down payment, the lender will usually let you borrow over a longer term. 

To understand why, you need to know how a boat loan works. The credit union needs to consider how much money is at risk. Therefore, the higher your down payment is, the better their chance of recovering the debt if they have to sell. 

Some companies will insist on a 10% to 20% down payment, but not all do. Irrespective of whether or not it’s a requirement, we recommend having a deposit. This reduces your overall indebtedness and increases your chances of getting the loan. 

Finally, the term also depends on your variable or fixed interest rate. Part of the calculations a financier must make is whether you can afford the repayments. They may, therefore, recommend a term of 20 years even if you only want it over 15.

Age of the Boat 

The older the yacht, the less likely you are to get financing over the long term. This may change for classic boats, but they’ll have to be in top condition. Most finance companies won’t give you a loan for yachts over 20 years old.

Your Credit Rating

The most important aspect to consider is your financial profile. Most companies require you to have a credit score of at least 600 to 700. We recommend checking your FICO rating at least once a year. 

If you’re in the low 600s, it might be worth waiting a few months. In the meantime, work on improving your score by:

  • Paying all your accounts on time
  • Paying off some of your debt so you aren’t always maxed out
  • Letting your salary sit in your account for a few days to pay off your overdraft temporarily
  • Paying more than the required minimum
  • Working towards using no more than half of your credit limits
  • Saving for that down payment

Contact Us for Expert Advice

Would you like a definitive answer to, “How long can you finance a yacht?” Call Canada Powersports Financing at 343-312-6482 for expert tips for purchasing your first yacht, or read more about buying a boat in Canada. We’ll walk you through the process step-by-step.

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