How this calculator works
A boat loan is an instalment loan secured by the vessel. The lender advances an amount, usually a proportion of the boat's price, and you repay it in equal payments with interest. Because the boat is collateral, rates are often lower than an unsecured personal loan, though they depend on the age and type of boat, the term, your credit and the lender. New boats may qualify for long terms, while older boats often have shorter limits. This calculator uses the standard amortisation formula with interest compounded monthly and a constant rate. In payment mode it divides the loan into equal payments over the term. In term mode it takes the payment as given and finds how long the loan lasts; a payment that does not cover the first month's interest never repays the loan, and the calculator rejects it. Sales tax, registration, insurance, mooring and maintenance are not part of the loan unless the lender finances them, in which case add them to the loan amount.
Formula
Monthly rate i = annual rate / 12. Payment = P x i / (1 - (1 + i)^-n) for P borrowed over n months. At a zero rate, payment = P / n. For a fixed payment A, n = -ln(1 - P x i / A) / ln(1 + i), which requires A > P x i. Total paid = payment x n and total interest = total paid - P.
Worked example
A $50,000 boat loan at 7.5% over 120 months has a monthly payment of $593.51, total payments of $71,221.06 and total interest of $21,221.06. Paying $600 a month instead repays the same loan in 118.08 months, with total interest of about $20,848.34.
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Frequently asked questions
How long a term can I get on a boat loan?
It depends on the lender and the boat. New boats commonly qualify for 10 to 15 years and sometimes 20, while older boats often face shorter maximum terms. A longer term lowers the payment but raises the total interest.
Is a boat loan tax deductible?
In the United States, interest may qualify as home mortgage interest if the boat has sleeping, cooking and toilet facilities and is used as a qualified second home. That is a narrow rule and does not apply to most boats. This calculator does not model tax.
What if I sell the boat before the loan is paid off?
You repay the remaining balance from the sale. If the sale price is below the balance, you owe the difference. Check the payoff amount with the lender before agreeing a sale.
Does the calculator include insurance or moorage?
No. Those are running costs, not part of the loan. Budget for them separately; insurance is usually required by the lender, and moorage can be a large annual cost.