This paper proposes an indirect fault detection method for an onboard degaussing coil system, installed to reduce the underwater magnetic field from the ferromagnetic hull. The method utilizes underwater field signals measured at specific magnetic treatment facilities instead of using time-consuming numerical field solutions in a three-dimensional space. An equivalent magnetic charge model combined with a material sensitivity formula is adopted to predict fault coil locations. The purpose of the proposed method is to yield reliable data on the location and type of a coil breakdown even without information on individual degaussing coils, such as dimension, location and number of turns. Under several fault conditions, the method is tested with a model ship equipped with 20 degaussing coils.