Boat Loan Calculator
Work out the monthly payment, the total interest and the amortization schedule for a boat or watercraft loan. Enter the amount you borrow, which is the price minus your down payment and trade-in, plus any sales tax or fees you finance. Boat loans often run 10 to 20 years, longer than most car loans, and the extra years add a lot of interest.
How to use the Boat Loan Calculator
- Enter the loan amount, the term in years and the annual interest rate. The loan amount is what you borrow, so take a down payment or trade-in off the price first.
- Press the Calculate button. You get the monthly payment, the total payment and the total interest, with the amortization schedule below them.
- The schedule opens with the first 12 payments. The Show all button under the table adds the rest, down to a balance of 0.00.
- To try another term or rate, change the value and press Calculate again.
The boat loan payment formula
M = P · r(1 + r)^n / ((1 + r)^n − 1)
M is the monthly payment, P is the loan amount, r is the annual rate divided by 12 and n is the term in months. The calculator rounds M to the cent. If the nearest cent would leave a last payment more than 1% above M, it rounds M up a cent at a time until it is not. Each month it charges interest of r times the balance, rounded to the cent, and the rest of the payment reduces the balance. The last payment clears whatever balance is left, so it can differ from the others. Usually the gap is a few cents, and it is never more than 1% above M. At a high rate over a long term the extra cent can pay the loan off early, because each cent repaid sooner saves interest for years. $20,000 at 36% over 30 years is 349 payments of $600.02 and a last payment of $140.93, 10 months before the term ends. The calculator shows the last payment under the result whenever it differs. At 0% the payment is P divided by n. A loan is repaid in whole monthly payments, so the calculator rounds a term that is not a whole number of months to the nearest month. 2.3 years is 27.6 months and becomes 28 payments.
Worked example
A $50,000 boat loan at 8% over 15 years has a monthly payment of $477.83. Of the first payment, $333.33 is interest and $144.50 reduces the balance. Payments 1 to 179 are $477.83 and the last one is $476.51. In total you pay $86,008.08, of which $36,008.08 is interest. Over 5 years the same loan costs $1,013.82 a month and $10,829.18 in interest. The 10 extra years lower the payment by $535.99 and add $25,178.90 of interest.
Frequently asked questions
Can I deduct boat loan interest?
If the boat has sleeping, cooking and toilet facilities, it may qualify as a "second home" and the interest may be deductible under the same rules as a mortgage on a second home. Check with a tax professional.
Can I include a down payment, trade-in or sales tax?
There are no separate fields for them. Enter the amount you borrow. That is the price minus your down payment and trade-in, plus any sales tax or fees you roll into the loan. A $60,000 boat with $10,000 down is a $50,000 loan.
Why are boat loan terms so long?
A longer term keeps the monthly payment low on a large purchase, and you pay for that in interest. $50,000 at 8% costs $10,829.18 in interest over 5 years and $50,372.97 over 20 years. On a long loan the balance also falls slowly, so for the first years you can owe more than the boat would sell for.
Should I finance a boat?
A boat loses value quickly and costs money every year in maintenance, storage and insurance. A larger down payment means a smaller loan and less interest, and it makes it less likely that you owe more than the boat is worth when you want to sell. Enter the smaller amount here to see the difference.