You found your “dream boat”, perhaps at the 2025 Miami Boat Show. You negotiated the price at the dealer’s table, and now, with the signed purchase order in hand, you’re ready to finance the vessel. What happens next?
“We always like to see a down payment,” says Erick Padron, Vice President of Lending at Tropical Financial Credit Union. “We’re currently at 70% or 80%. That shows some commitment from the borrower, regardless of how good their credit is.”
Padron says the loan officer will review the purchase order, which should include the serial numbers for the boat and engines. When buying from a dealer, the manufacturer includes the suggested retail price, Invoice or MSRP, and the manufacturer statement of origin, or MSO. The document must be in full order before a discussion of financing begins.
Because boats are a luxury item, Tropical Financial starts with the assumption that the borrower has the discretionary income to afford the vessel, Padron says. Still, borrowers should expect to provide basic financial information such as their gross monthly income and total debt payments such as mortgage or rent, car loan, and personal and student loans.
A credit report and the loan term, which can be from 620 to 780+ (240 Months), will help determine the rate.
Credit unions have a long history of being very competitive on loan rates, and Tropical Financial is no exception. It offers flexible terms based on the minimum loan amount. Suppose you buy a sleek 25-footer for $75,000 from a well-known manufacturer. With a 30% down-payment, you will borrow $52,500.
At a low 6.5% rate, for example, your monthly payment over five years would be $1,027.22. Plan to keep the boat longer? Over 10 years, your payment would drop to $596.13.
Remember, the longer the term, the more interest you pay. In this scenario, you would rack up about another $10,000 in interest by doubling the payback period.
Used boats are another story. “A traditional bank will not even listen to your request,” Padron says. “This is something that only the credit union will do. You can buy a boat from a private owner, and we'll take care of the financing. Buying a used boat from a dealer is the same process as buying a new boat.”
As with a new vessel purchase, there will be a down-payment and a credit check. The big difference is that an inspection will be required.
“Is the boat in a good condition? Is it in fair condition?” says Padron. “Does the boat need a lot of work?
“Depending on the boat, 26 feet or 5 net tons, we'll ask for a marine survey. It will be more specific as to the boat’s condition. Everything about the vessel will be listed there. From that, we usually come out with a fair market value.”
While all those factors, higher loan rates on used boats than new ones would make sense. However, the difference can be as little as one-quarter of a percentage point at Tropical Financial.
So, if a shiny new boat is more of a financial stretch than you would like, an older model of the same vessel might be the better choice. A loan officer at Tropical Financial can run the numbers so that you’re happy not just with the boat’s beauty but with what it costs to finance it. Learn more about our recreational loans on our website by clicking here or give us a call at 888-261-8328.
