1. Insights
  2.  → The Why and How of Boat Finance

The Why and How of Boat Finance

Jul 15, 2022 | Insights

Getting out on the water is one of the luxuries of living on our island continent, but affording a leisure craft doesn’t need to be. Boat finance may be more accessible than you think!
If you’re fishing for information on the ins and outs of how Loans for Boats work, let us cast our knowledge on boat finance and how you can launch your own loan application for a boat.

Boat financing explained

Boats look nothing like cars, but finance works in pretty much the same way when it comes to lending money to buy one.

Step 1. Ship around (uh, we meant shop around)

If you’ve got your boat licence and want to get out on the water with your marine mate, or if you’ve previously owned a boat, you’ll probably have a pretty good idea about what type of vessel you’re looking for. Figuring out the price point of your desired boat is the first step, to then look at your affordability and what loan amount you’d likely be applying for.

Step 2. Budget for the overall cost of boat ownership

Similar to car ownership, the full cost of owning a boat is more than simply the purchase price. Depending on the size of your vessel, you’ll need either a boat trailer or to organise a place for it to be moored. More often than not, trailers come with the boat as a package when being sold (especially a used boat from a private seller), but in some states, such as Queensland, registering the boat and the trailer are two separate registrations and thus two separate fees.

Of course, then you have the fuel, storing the boat, all your safety gear, boat insurance, and if you’re financing through a loan, you’ll have to factor in the loan repayments to your budget.

Step 3. Look at your boat finance options

It’s tempting to want to dive straight in and compare loans for boats, but first, you need to know what you’re looking for in boat finance. Simply searching for ‘low rate boat finance’ may not provide you with the results that you really need. Similar to personal loans, there are a few different loan options for boats that you should consider, to know what’s going to be best for you.

Your options when it comes to boat finance

As we mentioned before, the marine finance options that you have are similar to that of a personal loan. The options that are available will vary depending on the credit provider. 

Apply Online Now

Here are a couple of options to consider:

Unsecured Loans vs Secured Loans

You could already be familiar with these terms, ‘unsecured loans’ and ‘secured loans’, particularly if you’ve ever looked into car loans. They’re important to think about before you go for any type of personal loan, including a Loan for a Boat! That’s because Secured Loans for Boats will use the boat as a form of security in case you default on the loan and can’t pay it back, which could help get your boat finance approved or even score you a lower interest rate. Lower monthly repayments mean more money in your pocket to spend on weekends at the water!

Balloon payments

Balloon payments are one way to help make your boat finance more affordable in the early days. A balloon payment is essentially an agreed amount that you’ll pay back as a lump sum at the end of the loan period. What this means for you is that you could lower your repayment amount, allowing you to save money throughout the life of your loan, including to be able to cover the balloon payment at the end.

Loan terms & minimum loan amounts

Your loan term for boat finance may be restricted by some lenders, for example, if you really wanted a seven-year loan term, some lenders may only offer their loans for a maximum period of five years. Similarly, the minimum loan amount may be set at say $10,000, whereas your budget only permits purchasing a $7,000 boat.

To help with budgeting

You might like to use a Loan Repayment Calculator. While we don’t have a specific boat loan calculator, our car loan calculator works the same way.

Car Loan Calculator

Ability to pay off your loan early

Paying interest over multiple years on top of ongoing fees does add up, which is why it’s sometimes a good idea to make additional payments where you can to help reduce the interest charges and get your loan paid off quicker. Not all lenders that provide Loans for Boats are able to offer flexible repayments, the ability to make extra repayments or even pay off your loan early. Some do but then charge an early termination fee or early repayment fees for doing so! 

The great thing about Finance One is that there are no early termination fees or early repayments fees on any of our consumer loans, meaning you can make extra payments or payout your loan early with no extra fees!

Apply Online Now

How your credit rating affects your loan application

Finance specialists who offer loans for boats and jet skis often have a strict lending criteria for their applications. This can often mean that those with a poor credit history aren’t given a look in, or are led astray when it comes time to apply the interest rate, where the estimated monthly repayment is far more than they thought. If you’ve weathered some rough seas when it comes to your personal finance in the past and it’s left its mark on your credit file, then solely relying on the comparison rate (which shows the true cost of loans) could be misleading. Often, the competitive interest rates advertised only apply to those with a good credit history.

Where to go for Loans for Boats with Bad Credit

Your next boat, jet ski or even dream boat doesn’t have to pass you like a ship in the night, nor do you necessarily require good credit history to get a secured Loan for it.

At Finance One, we take a tailored approach to lending and will assess your individual financial situation.

If you’re considering applying for a loan for a recreational vessel, why not contact our team to find out the Finance One difference?Apply Now
Disclaimer: The information above is of a general nature only and does not consider your personal objectives, financial situation or particular needs. You should consider seeking independent advice regarding your legal, financial, taxation or other needs, to check how the information relates to your particular circumstances. We do not accept responsibility for any loss arising from the use of, or reliance on, the information. All loan applications are subject to normal lending criteria. Fees and charges payable. Terms and conditions apply.

Share this article



Makala Elliott

Makala is the Marketing Manager at Finance One. She has worked in the Finance and Lending industry for over 10 years, gathering a wealth of experience. She is passionate about helping Australians get back on track with their finances by passing on her knowledge.

Related articles

Say HELLO to our new logo!

Say HELLO to our new logo

We are proud to announce that after 11 years, Finance One has a new look. We assure you we are the same friendly, compassionate team striving to help everyday Australians with finance, even if they have experienced a poor credit history.While we...


Finance One Turns 10

Finance One is celebrating 10 years in business in 2020. While the business has grown to service close to 14,000 clients, the Finance One motto remains the same - to empower people through personal finance.Specialising in a compassionate...

covid 19 and my loan faq

COVID-19 and My Loan FAQs

We have compiled some responses to questions you may have in respect to your loan with Finance One during this time of uncertainty. We are here to help you work through this time. On 11 March 2020, the World Health Organisation declared the...