Horse Loans: Find Equine Financing for Your Needs
You can use a horse loan to buy a horse, although taking out a personal loan for a luxury purchase may not be in your best financial interests. In many cases, you’d be better served by renting a horse or saving up the purchase price over time.
For those of us who are not horse people, it is hard to understand why some people love their horses so much — enough to spend their hard-earned money on them while also cleaning stalls, brushing coats, and bailing hay just to have the opportunity to ride them once in a while.
If you asked a horse person why they do it, they will tell you it’s not just about the riding; it’s about being with them, caring for them, and just having them in their lives — so much that some people will go deep into debt for their equine friend. That might mean using a credit card to pay for food and supplies, purchasing a horse trailer, or even getting a horse loan to buy the horse itself.
On this page:
- Using Horse Loans to Finance Ownership
- Lenders That Offer Horse Loans
- The Benefits of Using a Horse Loan
- The Risks of Using a Horse Loan
- Alternatives to Using a Equine Loan
Using Horse Loans to Finance Ownership
Horses are expensive, but that doesn’t stop people from owning them or getting creative about how to pay for them.
How Much Do Horses Cost?
Americans love horses, enough to provide nearly 4 million of them with their own private stalls. The vast majority of horses are owned for fun, kind of like having a 1,000-pound pet. Horses owned for simple recreational pleasure will set you back about $2,000 to $8,000.
But if you want to buy a horse for hunting, jumping, or showing, you can easily drop anywhere from $20,000 to $50,000 — and that’s just for the horse. Horse trailers and barns are extra. Horses worthy of breeding start at $100,000.
Most horse owners are wealthy, or at least highly affluent, fully capable of purchasing their horses with cash. For aspiring horse owners on a budget, coming up with $5,000 to $8,000 for the perfect horse can be a financial challenge. In addition, horses can live between 20 and 30 years, further increasing the costs of long-term ownership.
How Can You Pay for a Horse?
There are actually a few options people have to finance the purchase of a horse. They can try to engage the owner in an installment arrangement, making payments based on terms set out in an agreement; there is also the lease-to-own option, whereby you make lease payments that go toward the purchase price. Personal loans through equine financing specialists are also available.
on LightStream’s secure website
Horse ownership financing from 5.74%* APR with AutoPay
- Finance your horse and its equipment, all at a low rate
- Loans fund as soon as the day you apply
*AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% higher.
Lenders That Offer Horse Loans
Although lenders will issue a personal loan for just about any purpose, as long as the borrower is creditworthy, many lenders may be hesitant to do so for the purchase of a horse. A part of the problem is that horses depreciate in value over time.
The larger issue, which presents a greater risk to both lender and borrower, is that horses can become sick or injured, increasing the cost of care. Or, they can die prematurely, which puts the borrower on the hook for payments for something they no longer own.
The following lenders offer loans specifically for equine financing.
LightStream, a division of SunTrust Bank, offers horse loans with annual percentage rates from 5.74% to 16.99% with autopay. Loan amounts run from $5,000 to $100,000; there are no fees or prepayment penalties, and you could receive your loan proceeds the same business day.
LightStream’s simple application and funding process mean you could have your new horse quickly. The downside, however, is that you’ll need excellent credit to qualify for the best rates. In addition, the longer your repayment term, the higher the APR you’ll face.
AgChoice Farm Credit
With a history of catering to farmers and ranchers, AgChoice offers a variety of loans geared toward everything from crops to livestock and, yes, horses. Included in its extensive product lineup is equine financing. Unfortunately, AgChoice doesn’t publish interest rates or terms and instead asks potential borrowers to contact them directly for more information.
One of the big benefits to working with AgChoice is that its bankers are also “horse people” themselves; many of them own horses themselves or even ride competitively. As a result, they’re uniquely qualified to help you make the best financial plan for purchasing your own horse.
Without any kind of information on its website, though, it’s hard to know what you’re getting into without talking to one of their representatives. That means if you’re just doing some basic research, you might get frustrated by the lack of transparency.
This lender specializes in “any purpose loans,” including loans for the purchase of one or more horses. Unlike other lenders, AMS equine financing covers not only the animal but also horse insurance, veterinary bills, maintenance, farrier costs, and equipment. Because of this, loan amounts can reach up to $100,000 depending on your needs and creditworthiness.
Financing options with AMS Financial include a credit card with 0% interest for 18 months, for those with irregular income; fixed-rate loans with standard repayment plans; and loans for applicants with lower income and/or bad credit. Approval takes as little as 30 seconds in most cases, according to the AMS website, and funding is usually completed within seven business days.
The Benefits of Using a Horse Loan
- You won’t have to wait until you save thousands of dollars — loan funding is typically fast and can sometimes take place the same business day.
- Borrowers with a range of credit histories can usually qualify.
- Making on-time payments can help you build credit.
- You’ll likely enjoy lower interest rates with a personal loan than you would when buying a horse with a credit card.
- You can upgrade or expand an already-viable equine operation earlier than originally planned.
The Risks of Using a Horse Loan
- You’re incurring debt for what is essentially a luxury purpose.
- If you cannot make your monthly payments, you could lose your horse — along with all the money you invested in their care and training.
- Your credit could take a huge hit if you end up defaulting on the loan.
- If your credit score is on the lower end, you may end up paying a higher APR, which could increase your monthly payment amount.
Alternatives to Using a Equine Loan
If you have your heart set on owning a horse but don’t want the risks associated with a personal loan, you still have other options.
Ownership sharing is when you own a horse jointly with another person who shares the cost of purchase and maintenance. The share of ownership depends on each person’s investment — if a horse costs $10,000, for example, and you each put in $5,000, you will have equal ownership.
Renting the Horse
If all you’re looking for is to be able to ride now and then, you may want to look into renting a horse. Many farms will allow you to rent their horses; in some cases, you will board and care for the horse yourself; in other situations, you will simply rent time with the horse at the farm where it lives.
Home Equity Loan
You could also look into a home equity loan or home equity line of credit for your horse purchase. These loan products typically have lower interest rates than what you’d get with a personal loan. The biggest drawback, however, is that it’s no longer the horse that’s at risk if you default — it’s your home.
Choosing the Horse Financing Plan That’s Right for You
Deciding to use a loan of any kind to purchase a horse is a big decision. Before choosing a lender, calculate both the upfront cost of the horse and the expense of caring for it over time. You’ll also want to compare loan offers so that you’re getting the best personal loan rates available and can easily afford the addition of another debt payment to your monthly budget.
If you’re unsure about going into debt for a horse, consider renting one or saving up the funds yourself over time. That way, you won’t be risking your credit score to spend time with an equine friend.
Author: Jeanette Perez
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