For millions of golf-loving Americans, joining a golf club is a pivotal life decision – the fulfillment of an ambition to take their game, their career, and their lifestyle to the next level.
It is also a major financial decision, one that is often rationalized by calculating the monetary benefits realized through enhanced business relationships and having a place the whole family can enjoy. By the way, there are no green fees.
Of course, that is because you will have paid a considerable initiation fee on top of monthly membership dues for the privilege of swinging your clubs – but, you can do it as often as you’d like. However, most people don’t have ten, twenty, or fifty thousand dollars lying around for an initiation fee.
Golf Club Membership is a Big Investment
If you have studied the cost of a golf club membership, you know it’s not cheap. Initiation costs, typically a one-time fee, start at around $2,000 and can run as high as $100,000. After that, you have to afford the annual dues of $3,000 to $10,000, which are usually collected on a monthly basis.
Both the initiation fee and the monthly dues can vary depending on the type of membership (i.e. family, individual, social, corporate, etc). You will also be required to meet the monthly food and beverage minimum, which ranges from $50 to $200 a month. Your monthly dues may or may not cover the cost of ancillary amenities such as golf carts, a locker rental, or club storage.
How much you end up paying for a golf club membership depends on a number of factors, including the type of membership, location, the number of public and private courses in the area, and the quality of the club’s course. Depending on where you live, you might find clubs costing less than $7,500 to join; but, if you want to join the premium club you might end up paying $25,000 or more to join.
Golf Club Membership Financing Options
You could wait several years to save the money you need, but then you would be missing out on the returns of membership – the business relationships, the professional training to improve your game, the freedom to golf on a championship caliber course whenever you want. You could instead finance your club membership just as thousands of avid golfers do.
Financing Through the Club
Not all golf clubs offer membership financing, but the ones that do typically partner with a local bank or a marketplace lender. The best reason to consider financing through a golf club is if it has a special arrangement with the lender, such as a 0% interest or low interest rate promotion. These are typically unsecured personal loans, so you will need to qualify based on your credit and employment history as well as your income. However, unless there is a special offer, you might be better off shopping for a personal loan on your own.
Personal Loans for Golf Memberships
Personal loans are the most common form of financing for gold memberships. Several lenders have begun to specialize in golf membership financing, offering unsecured loans from $2,000 to $100,000. The loan term can be as long as seven years or as short as two years, allowing you to fit the payment to your budget.
Personal loan APRs for golf memberships can range from 4.99% to 35.99% depending on the loan term and your credit qualifications. Because the loans are unsecured, lenders rely exclusively on your credit, employment status, and income for qualification. For example, LightStream, a leader in the online loan marketplace, currently offers APRs as low as 5.74%* with AutoPay for golf membership loans. To qualify for the lowest APRs with LightStream you must have good to excellent credit.
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What Can You Afford?
To get an idea of what a typical golf membership loan might cost you, consider the following scenario:
The golf club you want to join requires a $25,000 initiation fee of which you have saved $5,000. You have excellent credit that qualifies you for a $20,000, 60-month loan with an APR of 7.29%. You opt to pay the loan through autopay, which lowers your APR to 6.79%. Your monthly payment would be $394.
If, however, your credit score is less than great, your APR could jump to 13%, increasing your monthly payment to $450. That may not be much of a difference, but you still need to account for monthly dues as well as food and beverage fees, which can add another $300 to $500 to you golf club budget.
If your ambition is to get to the next level – for your golf game or your career – a golf membership can be a great investment. When you consider that you might be paying $600 to $1,000 a month between financing and club expenses, you might want to make sure you make the most of your membership in order to maximize your return.
*Payment example: Monthly payments for a $10,000 loan at 9.34% APR with a term of 3 years would result in 36 monthly payments of $319.58. LightStream disclosures here.
Author: Jeff Gitlen
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