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Boat financing in Australia
Owning a boat can be a lifestyle game changer. Weekends and holidays on the water. Family time, or (whisper it) fishing with mates time.
Boats are a lot of things. But they are not cheap. Analysis by Money.com.au shows the average amount requested for a boat loan in 2023 is $48,363. The average increases to $54,996 for brand new boats.
Interest and fees can quickly inflate the cost. But you can minimise this finance 'swell' by getting the cheapest boat loan you qualify for.
Let me show you how.
How does a boat loan work?
A boat loan is a type of personal loan you can use to buy a boat or other vessel.
Most lenders in Australia will offer some kind of finance for boats.
There are even lenders who specialise in lending for different kinds of marine vessels.
BUT the type of boat finance you get matters. See, boat finance can be either secured or unsecured.
Getting secured finance for your boat will usually be cheaper. Here’s why:
Secured vs unsecured boat loans
Secured boat loan
- The boat you buy acts as ‘collateral’ to secure the loan
- This reduces the risk for lenders so they offer lower interest rates
- You can also borrow a higher amount
- And you can sometimes get a loan with a longer term
- If you can’t repay your loan, the lender can repossess the boat
Unsecured boat loan
- With an unsecured loan, your boat can’t be repossessed
- You’ll generally pay a higher interest rate
- You may not be able to borrow as much
- The lender may only lend the money for a relatively short term
- You’re not limited to using the funds to cover the cost of the boat itself
What can you get with a boat loan?
Here’s what you can typically get with a boat loan in Australia:
- Borrow up to $100,000 (some lenders will give higher amounts)
- Boat loan terms from 1-7 years
- Finance a new or used boat
- Weekly, fortnightly or monthly repayment options
- Fixed or variable interest rates available
- No deposit required
- Interest rate tailored to you
What’s the cheapest interest rate for a boat loan?
Boat loan interest rates can start from around 6-7% per year. But for bad credit borrowers, rates can be much higher.
See, your interest rate will depend on your profile as a borrower. Lenders look at factors like your credit score, income, employment situation and whether you own your own home.
The age of the boat could also have an impact on your interest rate.
The common factor is risk: lower risk means a lower interest rate. Securing a low interest can significantly reduce the cost of financing a boat.
Best boat loan rate comparison
Compare a selection of boat loan interest rates in Australia, with ranges based on the borrower's credit score and other factors. The table is sorted by lowest comparison rate.
Harmoney | |
|---|---|
| Interest rate | Secured: 5.66% p.a. to 20.07% p.a.; Unsecured: 5.76% p.a. to 24.03% p.a. |
| Comparison rate* | Secured: 6.45% p.a. to 20.98% p.a.; Unsecured: 6.55% p.a. to 24.98% p.a. |
Plenti | |
| Interest rate | 6.57% p.a. to 24.09% p.a. |
| Comparison rate* | 6.57% p.a. to 26.28% p.a. |
NOW Finance | |
| Interest rate | 6.75% p.a. to 26.95% p.a. (21.65% p.a. for secured loan) |
| Comparison rate* | 6.75% p.a. to 26.95% p.a. (21.65% p.a. for secured loan) |
Pepper Money | |
| Interest rate | 6.75% p.a. to 26.95% p.a. (21.65% p.a. for secured loan) |
| Comparison rate* | 6.75% p.a. to 26.95% p.a. (21.65% p.a. for secured loan) |
Moneyplace | |
| Interest rate | Secured: 6.29% to 19.19%; Unsecured: 6.99% p.a. to 19.99% p.a. |
| Comparison rate* | Secured: 6.72% to 20.77%; Unsecured: 6.99% p.a. to 21.49% p.a. |
Liberty Financial | |
| Interest rate | Secured: 6.29% p.a. to 19.19% p.a.; Unsecured: 6.99% p.a. to 19.99% p.a. |
| Comparison rate* | Secured: 6.72% p.a. to 20.77% p.a.; Unsecured: 6.99% p.a. to 21.49% p.a. |
ING | |
| Interest rate | 6.89% p.a. to 18.99% p.a. |
| Comparison rate* | 7.10% p.a. to 19.23% p.a. |
Our Money Market | |
| Interest rate | 6.57% p.a. to 18.99% p.a. |
| Comparison rate* | 7.19% p.a. to 21.78% p.a. |
Great Southern Bank | |
| Interest rate | 6.99% p.a. to 18.99% p.a. |
| Comparison rate* | 7.24 % p.a. to 19.27% p.a. |
Bank of Melbourne | |
| Interest rate | 6.89% p.a. to 19.99% p.a. |
| Comparison rate* | 7.73% p.a. to 20.71% p.a. (variable rate) and 8.01% p.a. to 21.02% p.a. (fixed rate) |
BankSA | |
| Interest rate | 6.89% p.a. to 19.99% p.a. |
| Comparison rate* | 7.73% p.a. to 20.71% p.a. (variable rate) and 8.01% p.a. to 21.02% p.a. (fixed rate) |
St.George Bank | |
| Interest rate | 6.89% p.a. to 19.99% p.a. |
| Comparison rate* | 7.73% p.a. to 20.71% p.a. (variable rate) and 8.01% p.a. to 21.02% p.a. (fixed rate) |
NAB | |
| Interest rate | 6.99% p.a. to 20.49% p.a. |
| Comparison rate* | 7.91% p.a. to 21.33% p.a. |
ANZ | |
| Interest rate | 7.49% p.a. to 19.99% p.a. |
| Comparison rate* | 8.18% p.a. to 20.58% p.a. |
G&C Mutual Bank | |
| Interest rate | 7.99% p.a. to 16.99% p.a. |
| Comparison rate* | 8.20% p.a. to 17.22% p.a. |
Society One | |
| Interest rate | 8.20% p.a. to 23.99% p.a. |
| Comparison rate* | 8.27% p.a. to 25.64% p.a. |
Westpac | |
| Interest rate | 7.99% p.a. to 20.49% p.a. |
| Comparison rate* | 9.18% p.a. to 21.61% p.a. |
Commbank | |
| Interest rate | Unsecured: 8.49% p.a. to 20.49% p.a. (fixed); 8.00% p.a. to 20.00% p.a. (variable) |
| Comparison rate* | Unsecured: 9.88% p.a. to 21.78% p.a. (fixed), 9.40% p.a. to 21.30% p.a. (variable) |
Wisr | |
| Interest rate | 9.04% p.a. to 23.79% p.a. |
| Comparison rate* | 9.88% p.a. to 24.56% p.a. |
Latitude Financial | |
| Interest rate | 9.49% p.a. to 29.99% p.a. |
| Comparison rate* | 10.37% p.a. to 31.83% p.a |
MoneyMe | |
| Interest rate | 9.20% p.a. to 25.20% p.a. |
| Comparison rate* | 10.58% p.a. to 26.58% p.a. |
Fair Go Finance | |
| Interest rate | 21.90% - 25.90% (loan amount $5,050 - $10,000 ) |
| Comparison rate* | 27.54% - 33.80% |
Jacaranda Finance | |
| Interest rate | 18.95% p.a. to 27.00% p.a. |
| Comparison rate* | 37.10% p.a. to 45.70% p.a. |
| Interest rate | Comparison rate* | |
|---|---|---|
Harmoney | Secured: 5.66% p.a. to 20.07% p.a.; Unsecured: 5.76% p.a. to 24.03% p.a. | Secured: 6.45% p.a. to 20.98% p.a.; Unsecured: 6.55% p.a. to 24.98% p.a. |
Plenti | 6.57% p.a. to 24.09% p.a. | 6.57% p.a. to 26.28% p.a. |
NOW Finance | 6.75% p.a. to 26.95% p.a. (21.65% p.a. for secured loan) | 6.75% p.a. to 26.95% p.a. (21.65% p.a. for secured loan) |
Pepper Money | 6.75% p.a. to 26.95% p.a. (21.65% p.a. for secured loan) | 6.75% p.a. to 26.95% p.a. (21.65% p.a. for secured loan) |
Moneyplace | Secured: 6.29% to 19.19%; Unsecured: 6.99% p.a. to 19.99% p.a. | Secured: 6.72% to 20.77%; Unsecured: 6.99% p.a. to 21.49% p.a. |
Liberty Financial | Secured: 6.29% p.a. to 19.19% p.a.; Unsecured: 6.99% p.a. to 19.99% p.a. | Secured: 6.72% p.a. to 20.77% p.a.; Unsecured: 6.99% p.a. to 21.49% p.a. |
ING | 6.89% p.a. to 18.99% p.a. | 7.10% p.a. to 19.23% p.a. |
Our Money Market | 6.57% p.a. to 18.99% p.a. | 7.19% p.a. to 21.78% p.a. |
Great Southern Bank | 6.99% p.a. to 18.99% p.a. | 7.24 % p.a. to 19.27% p.a. |
Bank of Melbourne | 6.89% p.a. to 19.99% p.a. | 7.73% p.a. to 20.71% p.a. (variable rate) and 8.01% p.a. to 21.02% p.a. (fixed rate) |
BankSA | 6.89% p.a. to 19.99% p.a. | 7.73% p.a. to 20.71% p.a. (variable rate) and 8.01% p.a. to 21.02% p.a. (fixed rate) |
St.George Bank | 6.89% p.a. to 19.99% p.a. | 7.73% p.a. to 20.71% p.a. (variable rate) and 8.01% p.a. to 21.02% p.a. (fixed rate) |
NAB | 6.99% p.a. to 20.49% p.a. | 7.91% p.a. to 21.33% p.a. |
ANZ | 7.49% p.a. to 19.99% p.a. | 8.18% p.a. to 20.58% p.a. |
G&C Mutual Bank | 7.99% p.a. to 16.99% p.a. | 8.20% p.a. to 17.22% p.a. |
Society One | 8.20% p.a. to 23.99% p.a. | 8.27% p.a. to 25.64% p.a. |
Westpac | 7.99% p.a. to 20.49% p.a. | 9.18% p.a. to 21.61% p.a. |
Commbank | Unsecured: 8.49% p.a. to 20.49% p.a. (fixed); 8.00% p.a. to 20.00% p.a. (variable) | Unsecured: 9.88% p.a. to 21.78% p.a. (fixed), 9.40% p.a. to 21.30% p.a. (variable) |
Wisr | 9.04% p.a. to 23.79% p.a. | 9.88% p.a. to 24.56% p.a. |
Latitude Financial | 9.49% p.a. to 29.99% p.a. | 10.37% p.a. to 31.83% p.a |
MoneyMe | 9.20% p.a. to 25.20% p.a. | 10.58% p.a. to 26.58% p.a. |
Fair Go Finance | 21.90% - 25.90% (loan amount $5,050 - $10,000 ) | 27.54% - 33.80% |
Jacaranda Finance | 18.95% p.a. to 27.00% p.a. | 37.10% p.a. to 45.70% p.a. |
How do I compare boat loans?
Finding the best boat loan deal means comparing lots of options.
Money Matchmaker® will do the heavy lifting for you (particularly to weed out the loans you definitely will not qualify for).
But here’s a summary of the key factors to look at when comparing your boat finance options:
STEP 1: Compare interest rate
Interest will be the biggest cost of your boat loan. But ultimately the boat loan with the lowest advertised interest rate isn’t always the cheapest. Your actual interest rate could be a lot higher than the rate a lender advertises on its website. This is why getting personalised quotes from multiple lenders
STEP 2: Compare fees
I always recommend looking at interest rates combined with fees. This is what comparison rates are for. Be wary of loans with a comparison rate that’s much higher than the interest rate. The difference will be fees.
Boat loans can come with:
- establishment fees
- monthly or annual fees
- early termination fees
Make sure you know how much you’ll pay by checking the boat loan documents before you sign up.
STEP 3: Look for a suitable loan term
This is usually up to seven years, but our data shows almost all borrowers choose five years as a term for their boat loan.
If a longer term suits, some specialist boat finance providers may offer longer terms, up to 10 years. Just be aware that a longer term will mean you pay more in interest overall.
Try to choose a shorter term if you can, bearing in mind that the regular repayments will be higher.
STEP 4: Shop loan features that offer flexibility
Some boat loans offer the flexibility to repay the loan early and save on interest.
For example, some allow fee-free early repayment. Others may allow you to borrow more than 100% of the boat’s value so you can also buy boating equipment.
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Are you eligible for a boat loan?
Looking at the basics, you can generally qualify for a boat loan in Australia if you’re:
- 18 years of age or older; and
- an Australian citizen or permanent resident; and
- employed, with a regular source of income that you can demonstrate.
Lenders will also take a close look at your credit history and finances.
How to apply for a boat loan
- STEP 1: Compare as many lenders as possible.
- STEP 2: Use a boat loan calculator to work out which loan is the best deal for you based on overall cost.
- STEP 3: Apply for loan pre-approval with your chosen lender.
- STEP 4: Supply supporting documents requested by the lender (pay slips, bank statements etc.).
- STEP 5: Based on your pre-approved finance amount, it's time to go boat shopping!
- STEP 6: Give the lender details about the vessel you want to buy. The lender will then do a final assessment of your application.
- STEP 7: The lender will fund the loan (usually by transferring the funds directly to the boat seller).
What do lenders look for when you apply for a boat loan?
Lenders want evidence that you will be able to meet the boat finance repayments comfortably.
How they do this varies depending on who you apply with. But in my experience, this is what they generally ask about:
- Do you have a regular income?
- What's your employment history like?
- What are your regular expenses?
- Do you have other loans and debts (e.g. credit cards)
- Do you own other assets?
- Do you have dependents?
- How long have you been living at your current address? (The longer the better).
What documents will I need to supply to get a boat loan?
When applying for a boat loan, you may need to provide the following documents and information:
- Proof of identity e.g. passport or driver licence
- Proof of income e.g. payslips, bank statements
- Statement for any other loans or credit cards you have
There’s a different loan type designed for self-employed borrowers who can’t provide payslips
If you’re using a boat as security, you may also need to provide details about the vessel.
How lenders view credit history when you apply for a boat loan
Lenders are looking for evidence that you've been able to manage credit well in the past.
Ideally they want an extensive and blemish-free credit history.
That usually means a better chance of approval and a lower interest rate.
Doing a free credit score check can be a good way of seeing how healthy your credit history is before you apply.
Bad credit boat loans: can I get one?
This will depend on the details in your credit report and the lender’s risk appetite. But it is generally possible.
Some lenders even specialise in offering bad credit personal loans, including ones that can be used to finance a boat.
On the other hand, most banks and credit unions will not lend to borrowers with a bad credit score.
If you decide to apply for a bad credit boat loan, be prepared for the higher interest rates that are usually charged.
What sort of boat can I afford to buy?
To work this out, look at all your current expenses. This includes the likes of your mortgage, rent, childcare, car and any other credit repayments you have. Also consider likely future expenses.
And make sure you have a comfortable buffer for unexpected costs.
Whatever you have left over will give you an indication of how much you will be able to afford in boat finance repayments.
Use our boat loan calculator to work out what different loan amounts will mean for your regular repayments.
Can I use a boat loan for equipment and other expenses?
Secured boat loans usually only allow you to borrow the purchase price of the boat itself.
Unsecured boat loans can generally be used to fund your boat purchase and anything else you might need.
When applying, consider what extra costs you might need help covering:
- Boat maintenance: A rule of thumb is that maintenance costs up to 10% of the boat’s value per year.
- Safety equipment: you’ll need a personal flotation device for each passenger, flares and other safety equipment.
- Boating equipment: you might want fishing gear, watersports equipment or other boating equipment to use with your boat.
- Other ongoing costs: Including fuel, insurance and mooring costs if you can’t keep the boat parked at your home
The most important factor when working out how much you need to borrow is your regular repayments.
But don’t get too excited just because you can afford the regular repayment. Look at the total cost of the boat finance too, so you know exactly what you’re committing to.
Boat Loan FAQs
Get help from a real-life Money Matchmaker® from start to finish.
What credit score will I need to get a boat loan?
Different lenders have different risk tolerances, but generally the higher your credit score the more likely you will be to be approved for a boat loan.
Credit scores in the good, very good and excellent range are normally what most lenders are looking for.
But there are lenders who specialise in bad credit boat loans, so you can still get a boat loan outside of the high credit scores.
If you currently have a low credit score but make your repayments consistently, you may be able to refinance the loan to a lower rate down the track when your score has improved.
Learn about the process of refinancing a loan.
Is a new or used boat easier to get a loan for?
With a secured boat loan, lenders will look at the value of the boat at the start and at the end of the loan term.
The best interest rates can often be found on new boats.
Because they will likely have held onto more of their value come the end of the loan term.
This doesn't mean you can't get a loan for a used boat.
But you will likely have a higher interest rate
Because either won't be able to use the boat as security, or it will be seen as a higher risk loan.
What kind of vessel can I finance with a boat loan?
Boat finance (or marine finance) can usually be used for different kinds of water vessels, including speedboats, yachts, fishing boats, houseboats and jet skis.
Do I need to use my boat as security to get a boat loan?
In most cases no. Many lenders offer unsecured boat loans but these may have higher interest rates and lower maximum loan limits than secured boat loans.
How much can I borrow with a boat loan?
Each lender has different credit criteria and lending policies and the amount they lend to you will depend on their assessment of your ability to afford repayments.
Maximum loan limits for boat loans can be up to $200,000 or more.
Is boat finance hard to get?
If you meet the lender's eligibility criteria, getting a boat loan can often be a quick and straightforward process.
Many lenders allow you to apply online and, if you're approved, the loan funds can be paid to you within days, or even the same day in some cases.
Checking that you are eligible for the loan and are in a strong position to apply (for example, you have a good credit score and a reliable income) can help make the process of getting a boat loan faster and easier.
Is financing a boat a good idea?
A boat is a big purchase, whether you are buying a yacht, fishing boat, Jet Ski or other watercraft it can set you back tens of thousands of dollars.
A personal loan could be one way to get on the water faster.
But it will work out more expensive than paying for the boat using your savings.
Shopping around for the right loan can save you thousands of dollars in interest and fees.
Personal Loans guides and resources
The great thing about personal loans is they can fund almost anything. They are perfect when you need that bit extra to cover expenses, start a project or reset your finances to get back on track.
Written by
Loans Expert
Shaun McGowan
Reviewed by
Editor
Sean Callery
AS FEATURED IN
*Information about comparison rates Comparison rates are designed to allow borrowers to understand the true cost of a loan by taking into account fees and charges, the loan amount and the term of the loan. The comparison rate is based on an unsecured fixed rate personal loan of $30,000 over 5 years. WARNING: Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.
