US-DFS Blog

What Do I Need to Finance a Boat This Summer?

Financing a boat through US Dealer Financial Services (US-DFS) allows you to enjoy the freedom of the open waters without the immediate financial burden. Whether you're a first-time buyer or upgrading to a new vessel, understanding the requirements for boat financing can streamline the process and help you secure favorable terms. Here's what you need to know:

Boat Financing Requirements

1. Good Credit Score

Your credit score is crucial when applying for boat financing. US-DFS considers your credit score to assess your financial reliability. Typically, a higher credit score (700 and above) can help you secure better interest rates and loan terms. If your credit score is lower, don’t worry – we offer options tailored for various credit profiles, but you might encounter higher interest rates.

2. Down Payment

Most boat loans require a down payment, generally ranging from 10% to 20% of the boat's purchase price. A larger down payment can lower your monthly payments and reduce the total interest paid over the life of the loan. At US-DFS, we recommend saving up for this initial payment to improve your chances of loan approval and secure better terms.

3. Proof of Income

To ensure you can manage your loan payments, US-DFS requires proof of income. This can include pay stubs, tax returns, or bank statements. Providing this documentation helps us assess your ability to repay the loan and find the best financing options for your situation.

4. Debt-to-Income Ratio

Your debt-to-income (DTI) ratio compares your monthly debt payments to your monthly gross income. A lower DTI ratio (below 40%) is preferred as it indicates you have sufficient income to cover new debt obligations. A higher DTI ratio might affect your loan terms or eligibility.

5. Boat Details

US-DFS will need specific details about the boat you plan to purchase, including the make, model, year, condition (new or used), and price. For used boats, we might require a marine survey or inspection report to assess the boat's condition and value.

6. Loan Term Options

Boat loan terms can vary widely, typically ranging from 2 to 20 years. Shorter terms usually mean higher monthly payments but lower total interest paid. Conversely, longer terms offer lower monthly payments but increase the total interest paid over the life of the loan. At US-DFS, we help you choose a loan term that fits your budget and financial goals.

7. Insurance Requirements

Many lenders, including US-DFS, require boat insurance before finalizing the loan. Boat insurance protects your investment and our collateral in case of accidents, theft, or damage. Shop around for the best insurance rates and coverage to meet our requirements.

8. Loan Application Process

Once you've gathered the necessary documents and information, you can apply for a boat loan with US-DFS. The process generally includes:

• Pre-Approval: Get pre-approved to understand your loan eligibility and budget.

• Submit Application: Complete the loan application with all required documents.

• Loan Review: We review your application, credit, and financials.

• Approval and Funding: Upon approval, the loan funds are disbursed, and you can proceed with your boat purchase.

Top Questions We Get Asked About Boat Financing

1. What credit score do I need to finance a boat?
   • While a higher credit score (700 and above) can help secure better rates, US-DFS offers options for various credit profiles. Lower scores may still qualify but might incur higher interest rates.
2. How much of a down payment is required?
   • Typically, a down payment ranges from 10% to 20% of the boat's purchase price. A larger down payment can result in better loan terms.
3. What documents do I need to provide?
   • Proof of income (pay stubs, tax returns, bank statements), boat details (make, model, year, condition, price), and personal identification.
4. Can I finance a used boat?
   • Yes, US-DFS finances both new and used boats. For used boats, a marine survey or inspection report may be required.
5. What are my loan term options?
   • Loan terms can range from 2 to 20 years. Shorter terms mean higher monthly payments but lower overall interest, while longer terms offer lower monthly payments but higher overall interest.

Final Tips

• Shop Around: Compare loan offers from different lenders, including banks, credit unions, and marine finance companies, to find the best rates and terms.

• Negotiate Terms: Don’t be afraid to negotiate loan terms, especially if you have a strong credit profile.

• Read the Fine Print: Understand all loan terms, fees, and penalties before signing any agreements.

By preparing these essential documents and understanding the loan process, you can secure the financing you need to set sail on your new adventure with US Dealer Financial Services.

For more details on financing options, visit our boat loan calculator and explore our loan services. Don't forget to check out our insurance services to protect your new investment. Start your application today at US-DFS Online.