Selling a boat is a big decision. Selling a financed boat, one you still owe money on, can feel even more complicated.
It’s completely normal to feel unsure about how to handle it. Between payoff quotes, lien releases, and title transfers, the process can look confusing at first glance. But once you understand how the pieces fit together, it’s actually pretty straightforward.
At Rec Loans 360, we help boat owners make smart, stress-free financial moves every day, including navigating the process of selling a boat that still has a loan attached.
Here’s our step-by-step approach!
Step 1: Find Out Exactly What You Owe
Before you can sell your boat, you need to know your exact payoff amount.
Call your lender and ask for a 10-day payoff quote. This figure includes your remaining loan balance plus a few days of accrued interest. It’s different from the balance you see on your monthly statement.
The payoff quote gives you the true amount required to clear the loan completely.
Once you know that number, you can calculate whether your boat’s resale value covers it or if you’ll need to make up the difference.
Suppose the boat is worth more than you owe, great! You can sell it and pocket the difference. If you owe a little more than it’s worth, don’t worry. There are still safe, legitimate ways to complete the sale without losing money or risking your credit.
Step 2: Choose the Right Payoff Option
When selling a financed boat, you have three main ways to handle the loan. The best option depends on your payoff balance, your buyer, and your financial situation.
Option 1: Pay Off the Loan Before You Sell
This is the cleanest and simplest option. If you can afford to pay off the loan before the sale, you’ll receive a lien release from your lender once it’s cleared. That means the loan is satisfied and the title is free.
From there, you can sell your boat privately just like any other item you own outright.
Lenders usually send the release and updated title within 7–10 business days. Once you have that in hand, you’re free to transfer ownership to the buyer immediately.
Option 2: Use the Buyer’s Money to Pay Off the Loan
If paying off the loan in advance isn’t possible, you can use the sale proceeds to clear the balance.
Here’s how it works:
- You agree on a final sale price with the buyer.
- The buyer’s funds go directly to your lender to cover the boat loan payment in full.
- The lender confirms receipt, releases the lien, and sends the clean title to you or directly to the buyer (depending on the lender’s policy).
Let’s say you’re selling your boat for $70,000, and you owe $20,000. The buyer can send $20,000 straight to your lender and the remaining $50,000 to you. Once your lender confirms payment, the title gets released, and everyone walks away satisfied.
As long as you are straightforward with your buyer about the existing loan, this can be a successful and safe approach to selling your boat!
Option 3: The Buyer Pays the Lender Directly
Some lenders prefer or even require this route, especially for large sales or when a broker is involved.
In this setup, the buyer pays the payoff amount directly to your lender. Once the boat loan is cleared, the lender issues a lien release and sends the title to the new owner.
Meanwhile, you receive the remainder of the sale funds (anything beyond what was owed).
This approach adds a layer of security for both sides. The buyer knows the title will be clean, and you know the loan is paid in full.
Step 3: Handle the Paperwork Properly
Handling title transfers is so much more than just giving your buyer the note and calling it a day. Here’s how we suggest making sure all of your paperwork is in order:
- The lien release letter or payoff confirmation from your lender
- The boat title is now clear of any financial obligations
- A Bill of Sale, signed by both you and the buyer
- State registration or transfer documents
If you’re unsure about local paperwork, Texas’ DMV or watercraft registration office can confirm what’s required.
For high-value boats, many sellers use a marine broker or escrow service to manage the process. They’ll handle communication with the lender, verify payments, and ensure the title is transferred correctly. It’s an extra safeguard for everyone involved.
A Few Smart Tips Before You Sell
- Stay transparent. Be upfront with buyers about your loan balance and how the sale will be handled.
- Loop your lender in early. They deal with these transactions regularly and can guide you through their exact process.
- Keep copies of everything. Payoff letters, Bill of Sale, and lien release documents should all be saved until the deal is finalized.
What If You Owe More Than the Boat Is Worth?
It’s a fact that, like RVs, boats depreciate quickly, and depending on how your loan was structured, you might still owe more than your boat’s current market value.
You have a few options:
- Cover the difference out of pocket at the time of sale.
- Refinance to lower your rate or monthly payment, giving you more flexibility while you sell.
- Trade in for a new or smaller vessel; in some cases, dealers can roll the remaining balance into your new loan.
If you’re exploring refinancing or need help with boat loan payments, our team at Rec Loans 360 can connect you with lenders who specialize in marine loans.
A Smooth Sale Starts with Good Information From Rec Loans 360
Selling a financed boat doesn’t have to be complicated. Once you know what you owe, communicate with your lender, and get the paperwork right, the process becomes simple and protects both you and your buyer.
If you’re selling your current boat to buy another, or if you’re looking to refinance before listing it, we can help make that next step easier.
At Rec Loans 360, one secure online application connects you to our nationwide network of lenders, so before you make a final decision, you can explore options, compare rates, and make it to the finish line without multiple credit hits.
Start your secure application today and take control of your next boating move with confidence.