Riding around on a jet ski offers a fun way to explore the shore that is more budget-friendly than many boats. Still, top models can come with a hefty price tag, ranging from about $7,000 to $25,000.
If you’re considering buying your very own personal watercraft (PWC), jet ski financing could be the way to go. Let’s take a look at several financing options, maintenance costs, and factors to consider when choosing the solution that’s right for you.
Key Points
• Jet ski financing options include personal watercraft loans and credit cards with promotional interest rates.
• A PWC loan is secured, using the watercraft as collateral, and terms depend on a borrower’s credit score and debt-to-income ratio.
• Credit cards with 0% APR promotional periods can be a good idea if you’re planning to pay off the jet ski before the offer ends.
• Improving your credit score and saving for a down payment could help lead to better loan terms.
• Alternatives to financing include saving up or buying a used jet ski to reduce costs.
Types of Jet Ski Financing Options
If paying cash for a jet ski or other PWC upfront isn’t in the budget, financing is always an option. Here are some jet ski financing solutions that can help make your purchase more manageable.
Personal Watercraft (PWC) Loan
Generally available from a bank, credit union, or online lender, a PWC loan is a secured loan with the watercraft as collateral. This means if you miss your monthly loan payments, the lender could repossess your jet ski.
The terms for a PWC loan depend on your credit score, debt-to-income (DTI) ratio, down payment amount, and loan amount.
Credit Card
If you plan to pay off your jet ski soon, using a credit card with a 0% APR promotional period may be an avenue worth exploring. These promotions usually last around 12 to 21 months. However, if you don’t pay off the full amount by the end, you’ll start paying the regular interest rate, which can be high.
Note that the credit card company can cancel your 0% rate if certain conditions aren’t met. They might even add a penalty rate, which is often higher than the regular rate on your card.
Financing Through a Manufacturer
Some watercraft manufacturers, like Sea-Doo, offer financing options. Some may even offer qualifying borrowers deals like 0% interest for a limited time, such as 12 months. As with a no-interest credit card, this could be a good financing option to consider if you’re able to pay off the charge before the promotional period ends. Otherwise, when it ends, you could get hit with high interest rates.
Personal Loan
Personal loans, another option for financing a jet ski, are typically offered through banks, credit unions, and online lenders.
You receive a lump sum of money upfront, and the funds can be used for nearly any reason. You’ll pay the money back in fixed monthly payments with interest. The loan terms and interest rate usually depend on factors like your credit score, income, and the amount of debt you currently have.
Unlike, say, many auto loans, personal loans are often unsecured, which means you won’t need to use your watercraft or any other asset as collateral.
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Factors Affecting Jet Ski Loan Terms
Planning on using a loan to pay for a jet ski? Personal loan requirements can differ by lender but commonly include the following:
• Credit score: This three-digit number helps lenders decide how likely you are to pay back the loan. A higher credit score, such as 670 or above, can show lenders that you’re a less-risky choice, which could help you get better rates and terms.
• Down payment: Some loans require a down payment, which is the amount you pay upfront toward the purchase.
• Debt-to-income ratio (DTI): Your DTI shows lenders how much of your income goes toward monthly debt payments. To find yours, add up your minimum monthly debt payments and divide by your monthly income before taxes. Lenders generally prefer to see a DTI less than 36%.
• Loan term: Lenders often offer terms from two to seven years for financing a personal watercraft. Larger personal loans usually have longer repayment terms.
How to Apply for Jet Ski Financing
Before you apply for PWC financing, check your credit score, as it’s one of the key factors in getting approved. You can check yours for free through your bank, credit card company, money tracker app, or credit counselors.
You’ll also want to review your credit report, which likely won’t include your credit score but does contain personal information like your credit account history, credit inquiries, collections, and bankruptcies. You can access your credit report for free each week from each of the three main credit bureaus via AnnualCreditReport.com. Review the report, and be sure to dispute any errors you see.
Required Documents
Some lenders let you prequalify, which can give you an idea of the rate and terms you may be eligible for. They’ll usually do a soft credit check, which doesn’t impact your credit score.
To prequalify, you’ll typically need to provide the lender with basic information, including your:
• Name and address
• Employment details
• Income
• Social Security number
Whether you’re shopping for a jet ski loan or vacation loans, it’s best to gather several different quotes so you can compare options and find the best fit for your needs and budget.
Application Process
Once you’ve determined which loan you want, you’ll submit a formal application. The lender will then perform a hard credit check, which may cause a temporary dip in your credit score. They’ll also review your debt-to-income ratio (DTI), which shows how much of your monthly income goes toward paying debts.
Once approved, you’ll receive your loan agreement. Carefully review it, and ask your lender about anything you don’t understand before signing on the dotted line.
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Comparing Financing Options
When it comes to paying for a jet ski, you have no shortage of options. Parsing the choices available to you — and figuring out which one fits your needs and budget — can take some work. Here are some questions to consider as you compare your jet ski financing options:
• What is the APR?
• What will my monthly payments be? (A personal loan calculator can show you how your monthly payment can change based on your interest rate and loan terms.)
• How long will I have to repay the loan?
• Are there any extra fees?
• Is there a prepayment penalty?
• Will I need to use the jet ski or another asset as collateral?
Costs Associated with Jet Ski Ownership
Buying a jet ski is just the beginning of the costs involved. At a minimum, it requires routine maintenance, a safe place to be stored, and insurance.
Here are some of the jet ski ownership costs to include in your budget:
• Insurance: You’ll need to buy insurance to protect yourself, your jet ski, and cover any liability. The cost of insurance typically depends on factors like the make and model of your jet ski, your past claims, and the purchase price. Liability-only starts at $100/year.
• Maintenance: From basic servicing to simple repairs, you’ll want to budget for the cost of upkeep on your watercraft. Additionally, if you live in a colder area, you might need to pay for winterizing and storing your jet ski during the off-season.
• Gas: Fuel costs depend on your location, how often you ride, and the type of fuel you need. On average, you can expect to pay around $45 to fill up a watercraft with a 15-gallon tank.
• Trailer: To transport your jet ski from home to the marina, you’ll need a way to move it. A trailer can help you do that. Trailer costs can range from a few hundred to a few thousand dollars, depending on the features you want.
Tips for Getting the Best Jet Ski Loan
When you’re looking to finance a jet ski, it can be helpful to remember that terms, rates, and extra benefits vary from lender to lender. The following strategies can help you position yourself for more favorable terms.
Improve Your Credit Score
Lenders pay close attention to your credit score when deciding if you qualify for a loan and what interest rate you’ll get. Generally speaking, a higher credit score often translates to better rates. To help build up your score before applying, consider strategies like making consistent, on-time payments, paying down as much debt as possible, keeping old accounts open, and lowering the amount of available credit you use.
Save for a Down Payment
Setting aside money for a down payment can reduce how much you need to borrow. Moreover, a larger down payment could help you get a better rate and reduce your monthly payments. Some lenders may require a down payment of 10% to 20% of the purchase price, so it’s a good idea to check the lender’s requirements.
Shop Around
While it might be tempting, try to avoid settling for the first loan offer you see. It’s best to take your time to compare a few different lenders to find the best rates and terms. Exploring your options can help you feel confident that you’re getting the best loan available.
Alternatives to Jet Ski Financing
Financing a jet ski or watercraft isn’t the only way to enjoy some fun on the water. Here are a few other options to consider:
Save up: Instead of financing your jet ski, try saving up for your purchase. Start by deciding how much you’ll need, and set up a savings plan. Opening a high-yield savings account can help your money grow while you work toward your goal of buying your new ride.
Buy used: Even though it may take a little extra research, buying a used jet ski can help you get out on the water for less money. New jet skis and other watercraft typically lose value as soon as they hit the waves, so a well-kept used jet ski can be a sound alternative. J.D. Power recommends looking for a used model that is less than five years old or with only around 100 hours of use.
Rent: Deciding to rent a jet ski is a much cheaper option than buying one, especially if you jet ski only occasionally. This way, you pay only for the time you use it and avoid yearly maintenance and storage costs.
Considerations Before Financing a Jet Ski
Cost isn’t the only thing to think about when buying a jet ski. Other things to consider include where you will store your watercraft. Jet skis need a secure place when they’re not in use, whether it’s in your garage, at a marina, or in a storage facility. Consider both your available space and the storage costs.
Also think about how often you’ll realistically use the jet ski and where you’ll take it. Will it be a weekend hobby, or are you planning to use it just a few times a year? Knowing how often you’ll use it can help you decide if financing a jet ski is worth the investment.
The Takeaway
Buying a jet ski is exciting, but it’s important to think about how you’ll pay for it. Before you dive in, check out all your jet ski financing options so you can find one that fits your budget. It’s also a good idea to shop around to compare the rates and terms offered by different lenders.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
FAQ
What credit score do I need for jet ski financing?
Most lenders look for a credit score above 600 to approve a jet ski loan. However, having a score over 670 may help you qualify for better rates, which could help you save money on interest in the long run.
How long are typical jet ski loan terms?
Loan terms vary by lender, but you can usually find terms up to seven years. Note that while longer terms can lower your monthly payments, they may also increase the total interest you pay over the life of the loan.
Can I get jet ski financing through a dealership?
Yes, many dealerships offer financing options, but they may work with a third-party lender to provide the financing. This means you’ll still need to meet the third-party lender’s approval requirements to qualify for a loan.
Photo credit: iStock/Andrija Dobras
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