If you have a poor credit rating but want to get a boat loan for business, living or recreational purposes, it may be possible to do so. The bad news is the financing offered you may be only as good as your credit history and you may not get the best boat loan rates offered by lenders. Any bankruptcy, foreclosure, defaulting or other bad credit experience will go on your credit report and mark you as a high-risk borrower to lenders. This means that if they do decide to offer you a marine loan to buy your boat, it will probably be at a high interest rate. To get the lowest boat loan rate possible and decrease your odds of being turned down, keep in mind these tips on getting marine financing.

Updated November 24, 2009

1. Know what to expect. Get a copy of your credit report and credit score to find out how bad the situation is - in other words, what lenders see when they look at your credit history. It may not be as bad as you think. Or you may find an error on the credit report, which you should fix right away.
   

2. Before you talk to a marine lender, start repairing your credit history. Make your payments on time. Pay off outstanding debts. Improve your debt-to-income ratio. If you're having trouble making your payments, contact your creditors to establish a payment schedule. Don't let your finances slide again. No lender is likely to offer you a low rate boat loan without being assured you'll pay it back on time.
   

3. Research the boat or yacht you intend to buy. Write down the specifications to have ready when you apply with the marine lender. Specs to note down include the boat's year of manufacture, the make and model, the power type, and any additional features. Add up the total cost including the purchase price, taxes, and extras. The lender will verify that the prices you're paying are standard in the industry during the underwriting process.

4. If you are eligible, join a credit union that offers its members boat loans at low interest rates. The terms are often better with credit unions than at banks, finance companies, boat dealerships and other lenders

5. If you can't get a boat loan through a credit union, shop around. Optimally, verify that the small lender, finance company, yacht broker or boat dealership has a long-standing relationship with the National Marine Banker's Association or other marine finance organization in your area. The NMBA typically works with new small maritime businesses in getting them launched, and your lender may know more about boat loans, making them better able to evaluate your risk as a borrower

6. Consider financing the boat with the boat dealer, who may be able to get you incentive financing on certain boat models. Be aware that this won't be your cheapest option.

7. Try applying for a home equity line of credit to pay for your boat. You put your house at risk when you do so, so make sure you can pay back the marine loan. The U.S. Federal Reserve cautions that in most plans, your lender can without warning lower your line of credit or freeze all disbursals if they're worried about your paying them back.

• Don't be in an hurry to grab any offer for a loan that happens by. You're not alone in this situation; many lenders are finding themselves looking for customers who will pay back their loans, even if their credit history is fair rather than ideal. The bad economy means that you have a certain amount of leverage in negotiating for the boat loan terms you want.
• It's great if you get approved for a low-interest fixed rate loan, but it may not happen. Other marine loan options include balloon payment boat loans, in which the balance falls due on a pre-specified date. Be wary of variable rate loans with terms that change unexpectedly.