Different boat loans have different criteria, but typically, a marine lender wants to see a debt-to-income ratio of no more than 40-50% including your boat payment. The lower your debt to income ratio, the better. A lower ratio means you’re eligible for more competitive rates, better terms, and it may even mean lower lender fees.
A debt-to-income ratio (DTI) is calculated by adding up all of your monthly debt payments and dividing them by your gross monthly income. It’s a comparison of how much you owe (payments) with how much you earn (income). Expressed as a percentage, this calculation that compares your income to your debt gives lenders an idea of what the risk would be to lend you money for a boat loan. The lower the DTI the better because consumers with higher DTI ratios are generally viewed as riskier borrowers because they may have difficulty repaying a loan in full or making monthly payments.
Here’s an example of how to calculate your DTI:
Your monthly payments = $2,000
Your monthly income = $8,000
Your DTI ratio = 25% (2,000/8,000=0.25)