How to Finance Your Sailboat

Learn the keys to financing your sailboat.
Learn the keys to financing your sailboat. (Image: Dynamic Graphics Group/Dynamic Graphics Group/Getty Images)

Sailboat financing is available from $10,000 to $10 million. Financing a sailboat can be done in multiple ways. Most people try the traditional financing options through banks, but there are alternatives. Because sailboats are not simple to buy or sell, lenders have more stringent down-payment requirements to finance a boat than they would a car or a house. Alternative lending providers are more creative in the way they facilitate you in a boat purchase. Some of the key boat finance options include traditional bank loans, stock market loans, e-boat loans and finance brokers.

Apply for traditional loans through banking institutions. Sailboats cannot be easily converted into cash; therefore, traditional lenders typically require 20 to 50 percent down to qualify for a loan. You will also have to use the sailboat as collateral for your loan, just as you would use a house as collateral for a mortgage or a car as collateral for an auto loan.

Use your stock market portfolio to provide the financing needed to cover the 20 to 50 percent not covered by the traditional lenders. You can borrow up to 70 percent of the value of your stock, interest rates start at 7 percent and you can prepay at any time. Contact your financial advisor to assist you.

Apply online for e-boat loans. Your interest rate is determined based on your credit and your specific financial situation (assets and liabilities). A representative will call you to discuss your loan application and options. Apply for these loans in the comfort of your home by completing a one page, fill-in-the-blank online form.

Contact a finance broker connected with local boat dealerships. A broker handles your loan from the point at which you apply to the closing. The broker also provides document preparation and titling services to simplify the process. Brokers search the best rates, lenders and financing criterion and often get you approved for a loan -- in less than an hour in many cases -- even with challenged credit.

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