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How Easy Is It to Finance a Boat in the UK?

How Easy Is It to Finance a Boat in the UK?

Can You Finance a Boat in the UK?

Boats and yachts are some of the most extravagant assets that any of us can buy. They tend to cost a fortune – but give you an incredible wealth of luxury freedom on the open ocean!

Sadly, many of us cannot access excessive money just lying around waiting to be spent on such a luxury. The key, therefore, is to look into setting up boat financing – and yes, much like you’d take out a mortgage on a house, you can borrow money to help ease your way into purchasing a vessel, too.

How Do Boat Loans Work in the UK?

In the UK, there are two general types of boat loans. Generic lender-based direct loans are the most common, and it involves the buyer taking out a loan from a financier that they can pay back with interest over a certain amount of time.

The second but less common route is for the buyer to reach an agreement with the boat seller in question. The seller may ask for a lump sum from the start as a down payment on their vessel, then agree to a set amount to be paid to them over the course of an agreed amount of time. Again, in this kind of deal, the seller usually asks for interest on the payments – it’s to be expected.

If you choose the second option, it is important to ensure that the seller is a registered boat seller and that the agreement has been written, witnessed, and signed through all legal channels. Where possible, consult your own solicitor before agreeing to hand any money over.

That being said, the most common and arguably safest way of financing a boat is by getting a loan from a registered company or lender. Much like you’d search for a payday loan in the UK, it’s easy enough to find lenders who will offer you credit at flexible interest rates.

a man out at sea on his speed boat

How Long Do Boat Loans Last in the UK?

Generally speaking, boat loans can be paid back over a period of 8 to 12 years, with some stretching to 18 years or more.

Of course, as is the case with any loan, the amount of time that you have to pay it back depends on a few things.

First of all, the company financing your boat will look at the price of the vessel versus your income and general expenses. From there, they will be able to determine how long it could take you to pay back the amount for the investment. If it’s determined that you may not be able to pay it back within a reasonable delay, you may not get finance at all – in which case, it’s important to boost your credit score.

The second point a financier or lender will have to consider is the price of the boat in question. The maths here should be fairly obvious – the cheaper the boat, the quicker you’ll be expected to pay it back.

The best way of knowing how long you could have to pay back your loan is to ask your financing company for an estimate ahead of time. This isn’t too much to ask, but you’re going to need to plan ahead before reaching out.

Things to Consider Before Financing Your Boat

Your credit history will greatly impact whether or not you get a loan and how long you will have to pay it off. If you have a bad credit history, then a financier is less likely to loan you money. You may have to approach a few before you get a positive result – though negative kickbacks may also affect your overall score.

If your credit history is particularly poor, it is definitely worth taking the time to consider whether or not buying a boat is the best thing for you right now. Even if it is a good deal, a boat is still a long-term commitment, as is a loan. You will need to assure yourself that you have available credit to pay back the loan over time – as missing payments will cause further damage to your score and your agreement.

Do also consider your prospective boat’s build quality and strength. Essentially, you need to think about how long the boat will likely last. If it is an older vessel with much work needed and you have a long payback loan, then is it really worth buying? The boat could be out of the water again before you’ve even paid back the loan, which would be a loss, to say the least.

Beyond your initial purchase, running any kind of boat is an expensive affair. From insurance and fuel to mooring and general upkeep and repairs, you will need to keep an eye on your finances.

While you may get the perfect loan to buy it, remember that along with your repayments, you will also have plenty of other expenses from the boat to consider. If you are unsure how much it could cost to run your ideal vessel, research the make and the maintenance required, the cost of mooring in your area, the cost of insurance, etc., before looking at financing the boat.

In this scenario, it’s probably worth asking a few different boat owners for ideas on how much ownership costs over time. There are plenty of UK boat owner forums you can dive into and ask advice from – and Reddit is a great place to start, too.

The final thing you must consider is the lender or financier you wish to partner with. Be sure to look carefully at user reviews and to consider interest rates. Reading the fine print is crucial before you sign any agreements!

a young man checking his affordability online for a boat loan

Should I Finance a Boat or Buy Outright?

If you have the capital to buy a boat outright, then it’s certainly an asset worth investing in! However, the costs of boat ownership, especially at the point of sale, demand a little more flexibility when it comes to finance.

Therefore, don’t be afraid to look around for loan options to help make getting your dream boat that little bit easier – just remember to read the small print!

If you’re looking at a boat for £15,000 or less, LoanBird can probably find you a lender to help finance this. We have personal loan lenders on our panel that actually specialise in larger loans, apply with us today for free, and check your eligibility now.

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