When it comes to buying a boat, estimating loan payments is simply a matter of basic math. Once you understand a few terms, you’ll be able to easily figure out how much to budget for your new boat purchase.

Typically, boat loans are between 10 and 20 years, depending on the down payment, your credit score, income and the amount of the loan. Depending on the size of the vessel, you can negotiate for shorter loans if you wish. You can also make additional payments to reduce the principal, but the monthly payments will remain the same during the life of the loan.

Most dealers or financial institutions have a specific formula for a minimum down payment. This will take into account your credit score, the overall price of the boat and how much your monthly payments will be. As you negotiate with your dealer, there can be a number of areas for negotiation. For example, if you want lower monthly payments, you may have to put down a little more up front or extend the term of the loan.

Your pontoon boat costs per month can vary based on the purchase price of the boat, down payments and the terms of the loan. You should be very sure before you sign on the dotted line that you can afford the monthly payments and that you have budgeted for maintenance, storage and operational expenses.

There are several institutions that offer boat financing. You can get one from a bank or credit union, or your dealer may provide financing directly. There are also marine-specific financing companies that are especially familiar with the ins and outs of boat loans. Before applying for a boat loan, you should find out any specific requirements of the institution. If you are buying from a dealer or if the boat is new from the manufacturer, it may not be necessary, but for used boats some lenders require a marine survey, and lenders usually require insurance. When applying for a loan, lenders will take into account the credit score, income and debt-to-income ratio and overall liquidity of the buyer. Also, keep in mind that since the boat itself is securing the loan, your experience with boats may come into play. Factors such as the size of the down payment and the length of the loan also impact the final terms of the loan.