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Over 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.
How much do horses cost?
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 $100,000 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 cover a wide range of expenses to keep the animal healthy. Here’s a quick breakdown of the average monthly cost of maintaining a healthy horse:
- Boarding fees: $150-$700
- Feed costs: $50-$120
- Farrier charges: $65-$150
- Healthcare: $167
- Miscellaneous: $50-$150
When it comes down to it, owning a horse can cost you between $6,000 and $7,000 a year — and more, depending on your location. You also need to be ready to cover these expenses for a long time. The American Veterinary Medical Association (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
If you have excellent credit and 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. That said, if your finances are shaky and you’ve got less-than-stellar credit, it’s best to work on those before taking out a horse loan, as you could end up with interest rates as high as 36 percent.
If you need help crunching the numbers to know whether financing a horse is the best move for you, use Bankrate’s personal loan calculator to get a complete picture of the costs. Additionally, make sure you compare quotes from multiple lenders before deciding on one. This will ensure you get the best terms and interest rates available for your situation.
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||Credit requirements||Origination fee|
|LightStream||7.99% – 25.49%* with AutoPay||2-7 years||Minimum credit score of 695||None|
|Upgrade||8.49% – 35.99%||2-7 years||Minimum credit score of 600||1.85%-9.99%|
|Best Egg||8.99% – 35.99%||3-5 years||Minimum credit score of 600||0.99%-8.99%|
|LendingClub||9.57% – 35.99%||3-5 years||Not specified||3%-8%|
|Prosper||6.99% – 35.99%||2-5 years||Minimum credit score of 600||1%-5%|
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.
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 1.85 percent and 9.99 percent of your loan amount.
Best Egg has funded more $21 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 600 to qualify, and the money comes quickly – typically one to three business days. The downside, though, is the need to pay an origination fee, which can be as high as 8.99 percent.
LendingClub 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.
That said, the lender’s maximum APR is a whopping 36.00 percent, plus you could end up with an origination fee as high as 8 percent. Those are steep borrowing costs compared to other lenders, so it’s something to consider if you have less-than-perfect credit.
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.
Buying a horse is a big commitment of money and time. But if you’ve determined that you are ready to welcome a new four-legged friend into your life, take your time to compare loan options. This will ensure your new horse doesn’t lead to a rough financial ride.