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Take it slow on a personal loan for a horse

Woman with horse in stables
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With appaloosas, hanoverians, thoroughbreds and more, you have plenty of choices if you want to buy a horse. There are more than 200 different breeds around the world. More than seven million horses live in the U.S., and while the horses you’re most familiar with might be the ones crossing the finish line at Churchill Downs, the majority of these animals won’t show up on a score sheet. According to data from the American Horse Council (AHC), more than 40 percent of horses in the country are purely for recreational use – no showing, jumping or racing.

If you want to make owning a horse your new hobby, be aware that this passion isn’t for those on a tight budget. Statistics from the AHC show that 50 percent of horse owners earn at least $100,000 per year. If you’re thinking about using a personal loan to buy a horse, move at a slow trot and carefully consider all the financial responsibilities first.

Costs of owning a horse

The first step to being a horse owner is likely much cheaper than you might expect. A healthy, non-competitive horse typically costs less than $5,000. However, the cost to bring a horse home can be much higher, particularly if you’re looking for a show horse. Some animals are priced at $40,000 or higher. On the other end of the spectrum, some horses are simply in need of a home and can be adopted for a few hundred dollars.

Don’t let the list price fool you, though. The initial price of a horse represents just one fraction of the costs you’ll need to cover as a horse owner. Each year, you’ll need to cover a wide range of expenses to keep the animal healthy. Consider these annual costs with data collected from IBIS World, the American Veterinary Medicine Association (AVMA), American Horse Publications (AHP) and Equine Chronicle:

  • Boarding: $900–$9,600
  • Nutrition (Forage): $240–$4,380
  • Nutrition (Grain): $0–$1,440
  • Hoof care: $260–$1,560
  • Healthcare: At least $360 (This can be much, much higher depending on your horse.)

While the low end of those expenses clocks in at $1,760, the high end adds up to nearly $17,000. You’ll need to be ready to cover those expenses for a long time, too. The AVMA says that the average horse lifespan is between 25 and 30 years, with some animals living to be over 40 years old.

Owning a horse comes with a much higher degree of financial responsibility than any other companion animal. “Regardless of whether you are purchasing outright or taking a loan to purchase, approach it as you would any major acquisition like buying a car or house,” Julie Broadway, president of the American Horse Council, says.

Personal loans as a way to pay for a horse

Broadway says no one on her staff – all of whom are horse owners – has ever used a personal loan to purchase their animals or even considered a personal loan as an option. After all, personal loans can come with some serious drawbacks including very high interest rates and oversized origination fees that are particularly troublesome if you have a habit of overspending.

However, there are some exceptions. If you have an excellent credit score and you have a strategy for paying the funds back, a personal loan can help you access cash quickly so you can join the ranks of horse owners. Use Bankrate’s personal loan calculator to get a complete picture of how much a loan will cost you and to compare multiple options before applying.

Best personal lenders for a horse loan

Most lenders don’t specialize specifically in loans for horses, although there are some niche agricultural-focused lenders that might serve your community and others that serve owners looking for competitive horses.

If you’re looking to borrow money to buy a recreational horse, we recommend you start your search with companies that offer good deals on personal loans that can be used for any major purchase.

Lender APR range Loan term lengths Loan requirements Origination fee
LightStream 5.73%–20.49% 3–7 years Minimum credit score of 660 None
Upgrade 5.94%–35.97% 2–7 years Not specified 2.9%–8%
Best Egg 5.99%–35.99% 3–5 years Minimum credit score of 700 to qualify for lowest APR 4.99% for loans with four-year terms
Lending Club 7.04%–35.89% 3 or 5 years Minimum credit score of 600 5 percent
Prosper 7.95%–35.99% 3 or 5 years Minimum credit score of 560 5 percent

 

LightStream

You’ll love LightStream because you won’t be charged any origination fees, which makes this the best option for a personal loan for anything – not just a horse.

Additionally, it sets itself apart from other lenders due to the fact that the company has a dedicated page for horse ownership lending. Other companies simply use a broad category of “major purchases”, so it’s clear that LightStream has some experience in working with borrowers who want to bring a horse home. Plus, loans are bigger here – up to $100,000.

Upgrade

Submit an application with Upgrade, and you can have your funds for your horse tomorrow. The company, which also offers a rarity in today’s banking industry – a rewards checking account, offers personal loans up to $50,000 with a range of term lengths up to seven years.

The major downside to working with Upgrade is that you’ll need to pay an origination fee that ranges between 2.9 percent and 8 percent of your loan amount.

Best Egg

Best Egg has funded more $14 billion worth of loans for a wide range of needs. For a personal loan for a horse, the company’s major purchase category is your choice.

You’ll need a credit score of 700 to qualify for the lowest APR, and the money comes quickly – typically one to three business days. The downside, though, is the need to pay an origination fee. If your loan term is four years or longer, that fee is a minimum of 4.99 percent.

Lending Club

Lending Club includes more than four million members who have borrowed more than $70 billion. It’s a good option if your credit score can help you qualify for the company’s lowest APR.

However, on average, personal loans from the company come with an APR of 15.95 percent, an origination fee of 5 percent and a principal of $15,800 with three-year terms. Those are steep borrowing costs that look more like a credit card.

Prosper

Prosper ranks among Bankrate’s best lenders for personal loans, thanks to the company’s willingness to offer joint applications – so if you’re looking to buy a horse with a family member or significant other, this can be a good option. However, you’ll both want to come with excellent credit scores to qualify for the company’s lowest interest rates. The other big drawback is that you’ll pay an origination fee of 5 percent.

Bottom line

Buying a horse is a big commitment of money and time. If you’ve determined that you are ready to welcome a new four-legged friend into your life, there’s no need to shout “Giddy up!” Take your time to compare loan options to make sure that your horse doesn’t lead to a rough financial ride.

Written by
David McMillin
Contributing writer
David McMillin is a contributing writer for Bankrate and covers topics like credit cards, mortgages, banking, taxes and travel. David's goal is to help readers figure out how to save more and stress less.
Edited by
Loans Editor