Can You Get a Boat Loan With a 640 Credit Score?

A 640 credit score sits in the "fair" credit range—not terrible, but not excellent either. If you're dreaming of buying a boat but worried about financing, you might be wondering: Can you secure a boat loan with a 640 credit score? The short answer is yes, but there are important factors to consider.

Understanding Boat Loans and Credit Scores

Boat loans function similarly to auto loans but often come with different terms and interest rates. Lenders assess your creditworthiness based on your credit score, income, debt-to-income ratio (DTI), and sometimes even the type of boat you're purchasing.

How Lenders View a 640 Credit Score

A 640 FICO score is considered subprime by some lenders but still within the approval range for many marine lenders. Here’s what you can expect:

• Higher interest rates – Since a 640 score indicates moderate risk, lenders may charge higher APRs compared to borrowers with excellent credit (720+).
• Stricter loan terms – You might face shorter repayment periods or larger down payment requirements.
• Fewer lender options – Some banks or credit unions may decline applications below 650, but specialized marine lenders may still approve you.

Factors That Influence Boat Loan Approval

Even with a 640 credit score, other financial factors can improve your chances of securing a loan.

1. Down Payment Matters

A larger down payment (20% or more) reduces the lender’s risk, making approval more likely. It also lowers your monthly payments and total interest paid.

2. Debt-to-Income Ratio (DTI)

Lenders prefer a DTI below 40%. If your monthly debts (including the potential boat loan) don’t exceed 40% of your gross income, you’ll have a stronger application.

3. Loan Term and Boat Value

• New vs. Used Boats – New boats often qualify for better rates due to depreciation concerns with used vessels.
• Loan Term Length – Shorter terms (5-10 years) may have better approval odds than 15-20 year loans.

4. Co-Signer or Joint Application

If your credit is borderline, adding a co-signer with strong credit can significantly boost approval chances and lower interest rates.

Where to Get a Boat Loan With a 640 Credit Score

Not all lenders are created equal. Here are the best options for borrowers with fair credit:

1. Marine-Specific Lenders

Companies like Trident Funding, Essex Credit, or LightStream specialize in boat loans and may offer more flexible terms for subprime borrowers.

2. Credit Unions

Local credit unions sometimes have lower credit requirements than big banks and may offer competitive rates.

3. Online Lenders

Platforms like LendingClub or Upstart provide personal loans that can be used for boat purchases, though interest rates may be higher.

4. Dealership Financing

Some boat dealers partner with lenders to offer in-house financing, which can be more lenient on credit scores.

Improving Your Chances Before Applying

If you’re not in a rush, consider these steps to strengthen your loan application:

• Pay down existing debt to lower your DTI.
• Dispute credit report errors that may be dragging your score down.
• Avoid new credit inquiries in the months before applying.
• Save for a bigger down payment to reduce the loan amount.

Realistic Expectations: Interest Rates and Terms

With a 640 credit score, expect:

• Interest rates between 8% - 15% (compared to 4% - 7% for excellent credit).
• Loan terms of 5-15 years, depending on the boat’s age and value.
• Possible requirement of a 10-20% down payment.

Alternative Financing Options

If traditional boat loans are hard to secure, consider:

1. Personal Loans

Unsecured personal loans don’t require collateral but usually have higher interest rates.

2. Home Equity Loans

If you own a home, a HELOC could offer lower rates, but your home becomes collateral.

3. Peer-to-Peer Lending

Platforms like Prosper or Funding Circle connect borrowers with individual investors.

The Bottom Line

Yes, you can get a boat loan with a 640 credit score—but it may come with higher costs. By improving your financial profile, shopping around for lenders, and considering alternative options, you can turn your boating dream into reality.

Would you take a higher-interest loan for a boat, or wait and improve your credit first? The choice depends on your financial priorities and how soon you want to hit the water.