David is a Chartered Financial Analyst with 15 years of experience in consumer lending, specializing in recreational and marine financing.
This 4-in-1 Boat Loan calculator helps you find the missing variable in your loan. Enter any three values for your new boat—Principal, Rate, Term, or Payment—and we will solve for the fourth.
Boat Loan Calculator
Boat Loan (Amortization) Formulas
i = R / 12 / 100 (Monthly Rate)
n = T * 12 (Number of Months)
Solve for Monthly Payment (M):
M = P * [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Solve for Loan Amount (P):
P = M * [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]
Solve for Term (n):
n = log( M / (M – P*i) ) / log(1 + i)
Solve for Rate (i):
(No direct formula; solved iteratively)
Formula Variables
- (P) Loan Amount: The total amount you are financing for the boat.
- (R) Annual Rate: The Annual Percentage Rate (APR) offered by your lender, based on your credit.
- (T) Loan Term: The length of the loan, typically 10 to 20 years for a boat.
- (M) Monthly Payment: The fixed monthly payment (Principal & Interest). This does not include insurance, docking fees, or maintenance.
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What is a Boat Loan?
A boat loan is a specialized installment loan, similar to an auto or RV loan, used to finance the purchase of a new or used watercraft. Because boats can be expensive and hold their value well (if maintained), these loans often function as a hybrid between a car loan and a mortgage. They are typically secured, meaning the boat itself acts as collateral for the loan.
Unlike auto loans, which are often 5-7 years, boat loans can have much longer terms. It’s common to see terms of 10, 15, or even 20 years, especially for larger, more expensive yachts. This long-term financing (T) makes the monthly payment (M) more affordable, but it’s important to understand how the interest (R) will accrue over that extended period.
This calculator helps you understand the relationship between these four key variables. You can find out what your monthly payment will be, or you can work backward to see how much boat you can afford (P) based on a payment you’re comfortable with.
How to Calculate a Boat Loan Payment (Example)
-
Identify New Loan Variables
You want to finance a new boat for $50,000 after your down payment.
• Loan Amount (P): $50,000
• Annual Rate (R): 8.5%
• Loan Term (T): 10 years -
Convert to Monthly Terms (i, n)
The formula uses monthly values:
• Monthly Rate (i): 8.5% / 12 / 100 = 0.0070833
• Number of Months (n): 10 years * 12 = 120 -
Choose the Payment Formula
Use the standard formula to solve for Monthly Payment (M):
M = P * [ i(1 + i)^n ] / [ (1 + i)^n – 1 ] -
Calculate the Monthly Payment
Plug in the monthly values:
• Numerator: 0.0070833 * (1 + 0.0070833)^120 = 0.01655
• Denominator: (1 + 0.0070833)^120 – 1 = 1.334
M = $50,000 * [ 0.01655 / 1.334 ]
M = $50,000 * 0.012406 = $620.30
Your new monthly P&I payment will be $620.30.
Frequently Asked Questions (FAQ)
What is a typical interest rate for a boat loan?
Boat loan rates (R) depend heavily on your credit score, the loan amount (P), and the age of the boat. Generally, rates are slightly higher than auto loan rates but lower than personal loan rates. As of late 2024/2025, rates can range from 7% to 12% or higher.
How long are boat loan terms?
Loan terms (T) are much more flexible than auto loans. While shorter terms (5-7 years) are available, 10, 15, and 20-year terms are very common for new and high-value boats. A longer term lowers the payment (M) but increases the total interest paid.
Do I need a down payment for a boat?
Yes, most lenders require a down payment, typically 10% to 20% of the boat’s purchase price. This is different from $0-down programs for homes (like VA or USDA) or some cars.
What other costs should I consider?
This calculator only covers Principal & Interest (P&I). You must also budget for boat insurance (which is mandatory for a loan), storage/docking fees, fuel, and annual maintenance and winterization costs, which can be significant.