How Long Can You Finance A Pontoon Boat?

How Long Can You Finance A Pontoon Boat? | Life of Sailing

Last Updated by

Jacob Collier

October 30, 2022

Key Takeaways

  • A secured boat loan ranges from 10 - 20 years
  • The bank may demand the boat be used for collateral.
  • A default on the loan may result in repossession.
  • Financing with a dealer may result in higher interest

For people considering the purchase of a pontoon boat, one question that often comes to mind is how long can you finance a boat?

A secured loan, where the boat is collateral, can run up to 20 years, depending on the bank and the owner’s creditworthiness. Lending institutions do offer personal unsecured loans for boat owners, but the rates are much higher and the terms shorter. Typical boat loans are 10 - 20 years.

As a lover of the water, who lives near a lake, I am often asked about boat ownership, including the best way to purchase one. Many families are discovering the wonderful experiences that they can have with a pontoon boat. In years past, the pontoon was deemed cumbersome, ugly, and a total waste of money, but no more. With modern designs attracting customers as never before, the pontoon industry is a billion-dollar business and is expected to grow tremendously over the next decade.


Table of contents

What is a Pontoon Boat?

A pontoon boat is a flat-styled boat that is buoyed by two or more air-filled tubes (pontoons). The pontoons provide the “lift” that the boat needs to stay afloat and a broader, more open surface to accommodate larger groups.

The pontoon boat was first developed in the mid-50s by a rural farmer from Minnesota named Ambrose Weeres. He intended to develop a homemade boat that he could use to go fishing on a nearby lake. His idea was to take a large deck surface made of wood and metal and connect several oil drums end to end. He attached two columns of the drums to the bottom of the boat, slapped a motor on the stern, and the pontoon boat was born!

Over the years, the pontoon boat has been redesigned and developed to be more sophisticated and safe. Today, many manufacturers produce trendy boats that families use to make memories and enjoy recreational activities.

Why is the Pontoon Boat So Popular?

The configuration of a pontoon boat lends itself to family activities. The more expansive space means that seating can be fashioned to face in any direction rather than the seating in a deck boat where all occupants must face forward.

A pontoon boat is like a patio where people can congregate. Its wider stance makes it safer on the water than many smaller deck boats because waves and wind make it less apt to be affected. The pontoon boat is a slower-moving watercraft, and while it is more deliberate (it operates at a slower speed, and as such, owners can take more time to make turns at safer velocities).

A pontoon boat is an ideal watercraft for tours and sightseeing. In addition, most pontoon boats have electrical outlets which allow occupants to plug in stereos or other items just as you would plug in an item in a household outlet.

Many pontoon boats are covered with tops that provide shade for most of the surface area of the boat’s deck. This allows families to enjoy the mild conditions of the lake without burning up from the sun's harmful UV rays.

How Long Can a Pontoon Boat Been Financed?

Typical boat loans range from 10 - 20 years, depending on the lending institution and the customer's creditworthiness. Potential owners with better credit histories will find more favorable terms. If considering the purchase of a pontoon boat, be sure to research various banks and the offers for loans they provide.

What Kinds of Loans Are Available for Potential Boat Owners?

There are two basic types of boat loans that most lenders offer.

Secured Loans

A secured loan is one where the boat that is being purchased is used as collateral for the loan.  While a secured loan reduces the risk for the lender, it can also help generate better terms for the consumer. Many lending institutions will not lend money if the boat is not offered as collateral.

Unsecured Loans

Another type of loan is an unsecured loan. This personal loan is based on the applicant's creditworthiness and may not have collateral. An unsecured loan increases the risk of default for both lenders and applicants. Unsecured loans will have higher interest rates and shorter lengths of term.

What Happens if the Loan is Unpaid?

Should the boat owner default on the loan, the bank reserves the right to repossess the boat and resell it to satisfy the remaining loan amount. Unfortunately, the resell rarely covers the total amount of the loan. Since this is the case, the bank will hold the default owner responsible for meeting the remaining obligation of the loan. Owners who default are still required to pay the bank by either continuing to make payments on a boat they no longer own, or paying the balance in full from savings.

Owners who default rarely have the funds to pay (otherwise, they would have continued making payments). A delinquent loan can adversely affect a person’s credit. A repossession will typically stay on a credit report for seven years.

It is important to remember that a loan is a contract between the applicant and the lender. As such, it is binding on both parties and must be repaid if possible. Primarily it is a signed IOU on the part of the borrower.

Can a Boat Loan Be Paid Early?

Yes, a secured boat loan can be repaid early. Depending on the terms of the contract, most secured loans have conditions allowing for repayment before the term expires.

Consult with the lending institution to ensure that they allow repayment and determine what conditions are required.

Is it Better to Finance With a Dealer or Bank?

Financing with a dealer’s lender can save the consumer because many rebates or incentives are tied to that financing. However, many dealers “mark up” the rate by as much as 2%. This markup allows the dealer to make money on the loan because they have bought it considerably cheaper than the actual lender. The consumer suffers because they are paying a higher interest rate every month. Banks are not required to divulge any markup to the customer.

A bank or lending institution with which the applicant has a good relationship is the best way to save money when seeking a loan. Most banks will offer competitive rates or better rates than dealers. In addition, the client is working with people who know, which eases the customer's comfort level. Certain rebates and incentives may not be able to be offered if one chooses a bank or lender, so depending on what those dealer incentives are should be factored into the decision.

What Factors Will a Bank Consider to Approve a Loan?

Several factors will help a bank determine if it will be lending money.

  • Credit Worthiness
  • Credit Bureau Scores
  • Payment History
  • Number and type of accounts on the bureau
  • Delinquent Payments or Late Payments on Credit Reports
  • Amount and Types of Debt
  • Amount of Income to Debt Ratio
  • Age and Employment and Income
  • Marital Status
How Long Can You Finance A Pontoon Boat?
Jacob Collier

Jacob Collier

Born into a family of sailing enthusiasts, words like “ballast” and “jibing” were often a part of dinner conversations. These days Jacob sails a Hallberg-Rassy 44, having covered almost 6000 NM. While he’s made several voyages, his favorite one is the trip from California to Hawaii as it was his first fully independent voyage.

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