How to Use a Boat As Collateral for a Personal Loan

Unless you have impeccable credit, most lending institutions require that you use some sort of collateral to secure your personal loan. Collateral items vary depending on the size of the loan. The most common type of assets people use to secure a personal loans are property, cars and boats. In order to use your boat as collateral for a personal loan, there are some steps you need to take to make sure that you get the loan amount you are requesting.


Step 1

Find a lender. Call your bank and other local lending institutions to see if they offer secured personal loans and if you can use a boat as collateral. Some lenders may not accept boats as collateral, which is why it's a good idea to call around.

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Step 2

Get the fair market value of the boat. If you want, you can get it formally appraised, but it's not necessary. Use the Value Check tool at This will give you the fair market value and help you determine the dollar amount of your personal loan.


Step 3

Gather all your boat documents. The lending institution will want a copy of the current title to make sure there are no other liens against it, as well as a copy of the registration and insurance.


Step 4

Get a new title. Once your loan is conditionally approved, you have to put the lending institution's name on the title as the lien holder before you get the proceeds from the loan. You do this at your local Department of Motor Vehicles or secretary of state.


Always expect the lender to use the lowest number. When you determine the value of your boat, it usually ranges between two dollar values, depending on things like the condition of the boat and hours used. The lender generally goes with the lower amount.


Never borrow more than you need. Remember, if you can't make the payments on your personal loan and you use a boat as collateral, the bank will repossess the boat.

Things You'll Need

  • Fair market value of the boat

  • Copy of boat title

  • Copy of boat registration

  • Copy of boat insurance

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