Boat Loan Interest Rates: Stay Afloat and Keep Them Low

One way to secure boat loan interest rates that are low and affordable is to use a Home Equity Boat loan, which borrows money against your home's equity. Since this is considered a form of home loan, you may be entitled to deduct some of the interest on your Federal Tax returns, which effectively lowers the rate of your interest.

There are two types of Home Equity Boat loans.

  1. The Line-of-Credit loan, which works very much like a credit card. This loan secures a line of credit you pay down over time, and only charges you interest on the balance each month. The rate of interest is connected to the national prime lending rate, however, so if the lending rate rises, you do run the risk of the rates going up.
  2. The Fixed Home Equity Loan, which works more like a traditional mortgage. You are charged a fixed interest rate over the life of your loan, and make regular payments until the loan is paid off.
The lender you choose can also make a difference. The National Marine Bankers' Association is a national organization of lenders -- national and local banks, financial service firms, and even some credit unions - who are familiar with the specific needs of borrowers seeking boat loans. If you apply for a loan from an NMBA member bank, your lender may be better able to tailor the loan's details to your specific needs than a traditional bank would.

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