How to Sell a Boat That You Owe On

How to Sell a Boat That You Owe On
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If you want to sell your boat but you still owe money on the loan, you don't have to pay off the loan before you can put your boat up for sale. Investigate your options. It's possible to sell your boat and pay off the loan at approximately the same time. As long as you and the buyer agree on the circumstances of the sale, selling a boat you owe on is acceptable.

Call your lender and ask for the payoff balance on your boat loan. Write the balance down for future reference. Ask about procedures for submitting the payoff. Inform the lender that you are planning to sell the boat, and you want to know how long it will take to release the lien once the loan is paid in full.

Determine the current value of your boat via the NADA Marine Guide or a similar reference. Set a selling price based on the current value. Try to set the price as close to the loan payoff amount as possible. You may want to set the price a bit higher than what you're willing to accept to leave you some negotiating room.

Advertise your boat for sale online and in print. Meet with interested parties. Negotiate and agree on a selling price with a serious buyer. Present the buyer with a bill of sale to provide him with documentation of the sale, which will prove helpful when the buyer transfers ownership of the boat into his name.

Request that the buyer write a payoff check in the correct amount directly to your lender. If possible, conduct this transaction at your lender, so the funds can be verified. If the amount the buyer is paying equals more than what you owe on the loan, ask the buyer to write two separate checks: One to the lender for the payoff, and one to you for the remaining amount of the purchase price.

Send the check to the lender, along with a written request to release the title to the buyer once the loan is paid off. Provide the buyer's mailing address. Alternatively, you can have the title sent to you, and you can deliver it to the buyer.


  • According to Thomas Cook, author of "Sell Your Boat in 30 Days," if you don't have the funds available to pay off the loan but want to do so, you can apply for a loan from another lender. Pay off the boat loan with those funds, then pay off the loan you received to pay off the boat with the proceeds from the sale of the boat.


  • Be careful when accepting funds from a buyer. You may want to insist that you verify the funds, or wait for the check to clear before releasing the boat to him.