There’s a lot to love about the equestrian world, from vast horse farms to beautiful breeds. However, there’s also a lot to pay for—and buying a horse is the first important step.
If you don’t have the cash on hand to pay for a horse upfront, then banks or lenders may be able to help. However, horse financing isn’t necessarily for everyone, and there are a few things you should know before taking out a personal loan to buy a horse.
How much does a horse cost?
Horses can range from just a few hundred dollars on the lower end of the price range to millions of dollars for rare and exclusive breeds. Much like a car or beautiful equestrian estate, horses vary widely in price.
There are over 200 different horse breeds globally. Some are bred for speed or strength, while others are carefully bred to achieve a specific aesthetic. However, if you need to take out a personal loan, a mid-range horse is probably a more realistic option. These cost anywhere from $2,000 to $8,000.
Other costs to consider
The cost of the horse itself isn’t the only expense you need to think about. Horses are expensive animals to take care of, and you should incorporate all the other costs of horse care into your final calculation before taking out a loan.
Your horse loan should cover all the following additional expenses:
- Vet fees
- Property maintenance
- Boarding (if you don’t already have a stable)
- Horse trailer
- Food and water
- Farrier work
- Show fees and apparel
- Tack and equipment
- Someone to take care of the horse
How to get a personal loan to buy a horse
Getting a personal loan to buy a horse is similar to getting a loan for any other purchase. You should first check your credit score to see what loans you’re eligible for, and then you can start shopping around and comparing loan rates.
1. Check your credit
Checking your credit score and credit reports is a quick and easy step that could save you time and money on a personal loan and spare you the anguish of rejection. Virtually every lender will check your credit, and you’re better off knowing what they’ll see before you apply.
Your credit score will determine your eligibility for a personal loan and what terms and loan amounts you’re offered. If you have poor credit, you’ll get stuck with high interest rates, which translates to more money that you’ll pay overall for your horse. If you have no credit history whatsoever, then you may struggle to get any loan at all.
2. Get prequalified
A good way to get a solid understanding of your budget and negotiate better loan rates is to get prequalified first. Prequalification doesn’t guarantee that you’ll get a particular loan, but it’ll limit damage to your credit from loan applications and make the whole process go a lot more smoothly.
Only submit a formal loan application once you’re sure your credit score is high enough. Submitting too many loan applications within a short period could be seen as a red flag by lenders and make it more difficult to get approved for the loan you need.
3. Choose a lender
Be sure to shop around and compare rates on personal loans before choosing one. Horses are a big commitment, but so are loans! You should pick the best one for your financial circumstances that you can realistically pay off.
When choosing a lender, you can go for a brick-and-mortar bank like Bank of America or an online lender like the ones below:
- Loan amount: $5,000–$100,000
- APR: 5.73%–20.49%
- Loan term: 2–12 years
- Loan amount: Up to $50,000
- APR: 7.46%–35.97%
- Loan term: 2–7 years
- Loan amount: $1,000–$50,000
- APR: 5.6%–35.99%
- Loan term: 3 or 5 years
When choosing a repayment period, bear in mind that the longer your repayment term, the more you’ll end up paying overall in interest. Think about whether you can afford to make larger payments over a shorter period to save money over the life of your loan.
Pros and cons of financing a horse
Taking out a personal loan to buy a horse is a major financial commitment, and it’s not for everyone. Before committing, spend some time thinking carefully about all the advantages and disadvantages of horse financing.
Pros:
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- Get the exact horse breed you want: Having the money to buy the horse you want (not just the horse you can afford) is exciting. There are plenty of beautiful breeds out there, and a personal loan will give you the luxury to choose your favorite.
- Experience the joys of owning a horse right now: Having a horse is an opportunity to connect with nature, exercise, and learn the ins and outs of the species. Being able to start a loving relationship with a horse now rather than after years of saving is a real privilege.
- Potentially build credit: If you make your loan payments on time and in full every month, a personal loan may help you build credit and improve your credit score. This will help you qualify for better loan terms on future purchases.
Cons:
- Higher cost than buying a horse upfront: From vet bills to boarding fees, owning a horse is a major long-term financial commitment, and the added interest charges and service fees from your loan provider make financing a much more expensive option overall than simply buying a horse outright.
- Limited loan options specifically for horses: Finding a personal loan specifically designed for purchasing a horse may be very difficult. Many lenders will simply classify you as a borrower making a luxury purchase, which means you may need to meet extra requirements to get approved.
- Potential to destroy your credit and finances: Missing payments can destroy your good credit and lead to accumulating interest and late fees. If you’re not fully prepared to repay your personal loan, you could end up deep in debt.
The bottom line
Many banks and online lenders offer personal loans that you can use to buy a horse. However, it’s important to weigh up all the pros and cons of financing a horse before you apply for any type of personal loan. This way, you can ensure you’re making the right choice for your finances and credit and your new equestrian friend.
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