Riding a personal watercraft (PWC), like a Jet Ski or a Sea-Doo, is exhilarating for water sports lovers. And because some models are roomy enough to accommodate up to three passengers, a small family or friend group can ride the waves all summer long.
A Jet Ski or Sea-Doo can be expensive, but owning one is not out of reach. If you’re determined to be the proud owner of a personal watercraft, there are multiple financing and loan options available.
What You Need To Know Before Financing a Jet Ski
Depending on the model you buy, a personal watercraft (PWC) can cost between $5,000 and $25,000.
PWCs depreciate like cars. A brand-new PWC may not be worth what you paid after it leaves the dealership. You may want to consider buying a used Jet Ski (or Sea-Doo) from a private seller. They may even throw in some accessories that would help reduce your overall costs.
New or used PWCs come with additional expenses – the sticker prices are just the start of your costs. From maintenance to making your monthly payments, if you finance your PWC with a loan, you’ll need to factor upfront – and ongoing – costs into your budget.
Think about the cost of:
- A transport trailer
- A hitch for your watercraft
- Storage
- Your boating license
- Personal watercraft insurance
- Boat accessories
- Annual maintenance
- Fuel
These additional expenses (and more) can – and will – add up.
How To Finance a Jet Ski
To finance a Jet Ski, you’ll need to know how much money you can borrow and what your monthly payment will be. Contact your local credit union, a bank or an online lender to see if they offer personal watercraft loans and compare interest rates and loan terms.
If you plan to buy a watercraft from a Jet Ski dealer, they may offer in-house financing with a special promotional offer. If you plan to put money down, this information will help the lender project what your monthly payment will be.
What kind of credit do you need to finance a Jet Ski?
The credit score you’ll need to qualify for a Jet Ski ski loan will vary by lender, usually lenders prefer a credit score of 600 or higher with a low debt-to-income ratio (DTI).
If your DTI is high or your credit score is lower than 600, you may improve your chances of qualifying for a loan with a co-borrower or a co-signer.
In-house financing programs may allow more flexibility for borrowers with low credit scores. But the lower your credit score is, the higher the interest rate will likely be on the loan.
The best time to buy a Jet Ski is during August and September when manufacturers make new models announcements and older inventory needs to be sold.
Jet Ski Financing Options
Financing a Jet Ski is not a one-size-fits-all endeavor. You’ll need to do some research and explore all your financing and loan options. If you’re concerned about the length of a loan, for instance, make sure you know how long or how short your repayment period would be for every loan option you consider.
Personal watercraft loan
Like a car loan, a personal watercraft loan is a secured loan. Your Jet Ski serves as the collateral to secure the loan. If you default on the loan, your lender may repossess your PWC.
Some lenders allow you to finance a Jet Ski for 12 – 60 months. Depending on the interest rate and loan terms, you may be eligible for a limited-time incentive such as a lower interest rate or 0% interest for loans with 12- to 18-month repayment periods.
✅Longer loan repayment terms available
✅Borrowers may qualify for special offers
✅Lower interest rates than unsecured personal loans
✅Loan cashout made directly to the seller
⛔Loan default can trigger repossession
⛔Higher interest rates than personal loans
⛔Pay more interest than purchasing with a 0% interest promotional credit card offer
⛔May require a larger down payment than other loan types to qualify
⛔Loan terms depend on your credit score and DTI
⛔Loan cashout made directly to the seller
If you own a car, the application for a PWC will feel very familiar. And you may receive financing within a few days or up to a week.
Personal loan
You can apply for an unsecured personal loan to finance your Jet Ski.
A personal loan might offer more time to pay back the loan than a PWC loan. With personal loans, you borrow a lump sum of money upfront that you pay off in fixed monthly installments over 12 – 60 months. Depending on your creditworthiness, you may be offered interest rates around 8% – 9%.[1]
Some lenders require a credit score of 650 or higher.[1]
✅Longer loan repayment terms available
✅Lump-sum payment to the borrower
✅Quick approval process
✅No collateral required
✅More price negotiation on Jet Ski due to money on hand
⛔Loan default can trigger repossession
⛔Longer approval process
⛔Pay more interest than purchasing with a 0% interest promotional credit card offer
⛔Loan terms depend on your credit score and DTI
Manufacturer financing
If you are buying a new or used Jet Ski directly from the manufacturer, they may offer in-house financing with incentives such as a 0% APR (annual percentage rate) with specific loan repayment terms.
✅Borrowers may qualify for special offers
✅nterest rates than unsecured personal loans
✅Deal directly with the lender
✅Lower interest rates than unsecured personal loans
✅Deal directly with the lender
✅May offer incentives such as a 0% APR (annual percentage rate) (APR) and a specific loan repayment term
✅Quick approval process
⛔Loan default can trigger repossession
⛔Loan terms depend on your credit score and DTI
⛔Less price negotiation on Jet Ski
⛔Shorter repayment terms in exchange for a lower interest rate
⛔Loan cashout made directly to the seller
Some manufacturer financing options include secured loans that use your PWC as collateral.
Credit card
Using a credit card to buy a big-ticket item can be a money-savvy move if you can rake in rewards, cash back or points, and you can pay off the balance before interest is tacked on.
You can also use a card with a 0% APR promotional offer to “eliminate” interest fees from your purchase. If you know you can pay off the Jet Ski before the promo period ends, interest won’t be charged on the purchase. If you can’t pay off the entire balance, you’ll pay market interest rates on whatever’s left over, making your Jet Ski purchase even more expensive.
Financing a Jet Ski with Bad Credit
First, the good news: You can buy a PWC with a low credit score. Now, the not-so-happy news: Loans for borrowers with low or bad credit typically have high interest rates and short repayment terms. The loans are usually secured loans, which means the lender will expect an asset to cover the loan. In this case, the collateral would be the Jet Ski. If you default on a secured loan, the lender will repossess your PWC.
If the waves can’t wait, expect to pay more and expect to deal with more debt. If the waves can wait, push pause on the loan and work on building your credit score so you can qualify for a better loan with better loan terms and – bonus – improve your credit history.
Consider taking out a credit builder loan. It works like the name says if you make all your payments on time. Once the loan is paid in full (yes, you get the loan amount after you pay it off), you can use the money as a down payment on your PWC.
The Waves Are Calling
Can you hear the ocean calling your name? If you want a PWC, don’t let a price tag steer you from your dreams of ownership! Look for an affordable financing option that lets you ride the waves with confidence. Your primary goal should be to make sure your new water ride doesn’t sink you into debt.
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National Credit Union Administration. “Credit Union and Bank Rates 2022 Q1.” Retrieved June 2022 from https://www.ncua.gov/analysis/cuso-economic-data/credit-union-bank-rates/credit-union-and-bank-rates-2022-q1