Boat Loan Calculator
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How to use the Boat Loan Calculator
To use the boat loan calculator, you’ll need to enter some details about your loan. These are explained below:
- Boat Purchase Price - The value of the boat you wish to buy. Boat loans are secured by the watercraft you purchase, and this amount will be relative to the base loan amount for your financing your boat.
- Initial Deposit / Trade-In Amount - The deposit amount put toward the boat during the purchase, or the amount you are offered when trading in your current boat or watercraft. The final loan amount (minus any fees) is calculated by subtracting the deposit or trade-in amount from the purchase price.
- Interest Rate - This is the fixed interest rate the lender will apply to your boat loan, and is used to calculate both the total amount of interest you will pay over the loan period and your scheduled repayment amount.
- Loan Term - The length of your boat loan as dictated by your loan agreement. The loan term is important as it will allow you to accurately calculate your monthly, fortnightly, or weekly payments through an Annual Percentage Rate (APR) calculation. The shorter your loan term, the higher your scheduled repayments will be.
- Establishment Fees - Any upfront fees charged by the lender when creating the secured boat loan agreement. Establishment fees are included in the calculation for your repayments to provide a more accurate total loan amount.
- Loan Amount - The amount of money you will be taking out under a boat loan agreement, including any fees, and discounting any deposit or trade-in amount.
Once you have filled in your boat loan details, simply click ‘See My Repayments’ to view an estimated repayment amount. You can then select Monthly, Fortnightly, or Weekly repayments to see what your repayment amount will be at various frequencies.
Boat Loan Repayment and Interest Formula
The boat loan calculator uses what is called an amortisation calculation. Amortisation is best understood as the way you will gradually repay your loan amount over time.
When you make your first repayment on your boat loan, a set portion of the amount will go toward repaying the interest. As you continue to meet your repayments, the portion of interest paid on each amount will decrease, and the portion paid on your principal amount will increase.
- Boat loans are generally secured, and offered for a fixed rate over a fixed term.
The simple formula for calculating your boat loan repayments is: Loan Amount / Discount Factor
The most difficult part to do yourself is in finding the discount factor, which is calculated by dividing the interest rate of your loan by the number of payments per year (12 for monthly, 26 for fortnightly, or 52 for weekly) to first obtain the Periodic Interest Rate.
The formula is expressed as: (((1 + i) ^n) - 1) / (i (1 + i)^n)
- n = the number of repayments
- i = the annual interest rate
Example of Monthly Boat Loan Repayments
| Boat loan amount | 5% interest | 7.5% interest | 10% interest |
|---|---|---|---|
$10,000 | $188.71 | $200.38 | $212.47 |
$20,000 | $377.42 | $400.76 | $424.94 |
$30,000 | $566.14 | $601.14 | $637.41 |
$40,000 | $754.85 | $801.52 | $849.88 |
$50,000 | $943.56 | $1,001.90 | $1,062.35 |
$60,000 | $1,132.27 | $1,202.28 | $1,274.82 |
$70,000 | $1,320.99 | $1,402.66 | $1,487.29 |
$80,000 | $1,509.70 | $1,603.04 | $1,699.76 |
$90,000 | $1,698.41 | $1,803.42 | $1,912.23 |
Boat Loan Calculator example
In the example below, we’ll look at an individual wanting to purchase a $50,000 boat, and they agree to a 7.5% fixed interest rate and a repayment term of 5 years.
- n = 60 (12 repayments per year for 5 years)
- i = 0.00625 (where the interest rate (7.5%) is divided by the number of annual payments (12) to provide a decimal representation of the interest rate)
- Using the discount factor formula above, we can calculate the discount factor: ((((1+0.00625)^60) - 1) / (0.00625(1+0.00625)^60)) = 49.9053
- The discount factor is then calculated as 49.9053
- We then take our loan amount ($50,000) and apply the Loan Repayment Formula, dividing the loan amount by the discount factor. This will provide your monthly repayment: 50,000 / 49.9053 = 1,001.897
- We then round this figure out to a double-digit decimal amount.
- Your monthly repayments on this loan will be $1,001.90
If you want to quickly calculate your repayments without creating your own spreadsheet with the above calculations, you can use our free boat loan calculator.
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FIND YOUR BOAT LOANBoat Loan Calculator FAQs
How do you qualify for a boat loan?
To qualify for a boat loan in Australia, you will need to be over the age of 18, a permanent resident or citizen of Australia, able to verify that you earn a steady income, and most importantly prove your ability to repay the boat loan amount.
What is the interest rate for a boat loan?
Secured boat loans will generally use fixed interest rates offered between 5.00% and 29.90%. You can get the best interest rates on a boat loan by purchasing the vehicle from a franchise or dealership, however you are still able to obtain reasonably low rates if you wish to purchase the vehicle through a private sale.
Can I get a boat loan if I have bad credit?
Yes, you can get a boat loan with bad credit. Bad Credit Boat Loans are offered by non-bank lenders and will have higher interest rates than standard boat loans. You will still need to prove your ability to meet repayments, and it is very likely that you will be asked to provide extensive supporting documentation to the lender.
How much can I borrow on a boat loan?
The average amount for a boat loan in Australia is $30,000. Most lenders will approve a secured boat loan application for anywhere between $5,000 and $100,000. The amount you are able to gain approval for will depend on your personal borrowing profile, which will be assessed according to your income and credit rating.
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