Do you have your heart set on a new jet ski this summer? With prices stretching to nearly $15,000 apiece — and you may want more than one for families — you may be busy researching jet ski financing options to turn your daydreams into reality.
Getting jet ski financing isn’t difficult. In fact, it’s similar to financing most other recreational vehicles. But some methods are better than others, depending on your particular situation. We’ll walk you through some affordable ways to finance your purchase and some options you would probably be wise to avoid. Keep reading to compare your choices using our side-by-side chart.
How to finance your jet ski
As with any type of financing, the better your credit rating, the more attractive the options you may have available to you.
- Manufacturer financing
Vehicle manufacturers are known for offering attractive interest rates for well-qualified borrowers as an incentive to purchase certain products or models. Whether you’re buying a jet ski or another type of vehicle, financing through the manufacturer will often be the most affordable way to go — if you have good credit. In fact, with good credit scores you might even be able to score 0% APR financing through a manufacturer, albeit likely for a shorter loan term (e.g. 12 months) or introductory period. Keep in mind, that low initial APR could jump to a much higher rate if you need more time to pay off your loan.
- Powersport loans
Banks, credit unions and online lenders will offer loans for jet skis under different names including specialty vehicles, sport or leisure vehicles. These loans may have higher rates than manufacturer financing incentives but typically come with lower interest rates than personal loans, which we’ll talk about next. If you’re comparing rates on powersport loans with manufacturer loans, remember that your rate on a manufacturer loan may change over time. Calculate your total interest over the life of the loan to see which option may give you the lowest cost for financing. We recently found powersport loan rates as low as 4.29% APR with more offers around 5% and 6% APR though again, the best rates tend to go to those with the best credit and for the shortest terms.
- Personal loans
Many banks and online lenders offer personal loans which can be used to finance a jet ski purchase. If your credit scores are in less-than-perfect condition, you might have an easier time qualifying for a personal loan (depending upon each lender’s requirements) when compared with other borrowing alternatives. However, if your credit scores are in great shape, there’s a chance you might be able to find a more affordable way to finance your jet ski purchase.A personal loan also might be your best bet if you’re looking to buy a used jet ski that you can’t — or don’t want to — pay for with cash. Some banks may have minimum amounts for powersport loans but lower requirements for personal loans.
- Credit cards
Although it may technically be possible to use a credit card to finance your jet ski purchase, it’s usually not a good idea. Unless you have an attractive introductory rate offer, credit cards are a notoriously expensive way to finance big purchases. Also, if your debt-to-limit ratio climbs higher because of an expensive purchase, your credit scores could suffer until you’re able to pay down your card balance. “Putting a big, fun purchase on a credit card is tempting, but it may be a costly mistake,” said Eric Rosenberg, founder and editor at Personal Profitability. “Unlike a mortgage or a car loan, where you get a lower interest rate because the loan is secured by the vehicle, that isn’t true with a credit card. You could easily find yourself paying 20% or more to pay off that jet ski. No amount of fun is worth that cost.”
Which type of jet ski financing is right for you?
The best way to finance a jet ski is going to be different for different people. Here’s a side by side comparison to help you compare the features of the four jet ski financing options above.
|Average Interest Rates||Changing Interest Rates||Credit Requirement||Risk of Credit Score Damage from High Utilization|
|Manufacturer Loan||Interest rates may start as low as 0% for qualified borrowers||Rates sometimes start out low and increase over time||Good or better to qualify for the best offers||No|
|APRs usually lower than personal loans||Rates are typically fixed over the life of the loan||Varies — the higher your score, the better your interest rate||No|
|APRs usually higher than powersport loans||Rates are typically fixed over the life of the loan||Some lenders have options beginning at a minimum credit score of 525 (though you probably won’t get the best interest rates).||No|
|Credit Cards||Average APR is 16.86%||Rates may change over time||N/A if your account is already open||Yes|
*Note: The chart above is a helpful guide, but you should always check with individual lenders to compare the specific rates and terms available when shopping for any type of financing.
What to look out for when financing a jet ski
It’s true that owning a jet ski can be a lot of fun. However, you shouldn’t finance any recreational vehicle unless there’s room in your budget to afford it.
Rosenberg recommends that you “never let this type of purchase put you under financial pressure. It isn’t worth the cost if you’ll miss other bills.”
Not sure how much jet ski you can afford? This helpful payment calculator from LendingTree can help you to figure out the answer. LendingTree is MagnifyMoney’s parent company.
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