Many see it as a special privilege and last but not least luck if they have their own horse. Equestrian sport is not only a big issue for little girls. In addition to a nice hobby, you will also find one or the other full-time horse owner who can earn a lot of money with his beloved four-legged friend. No matter whether as a rider at large tournaments or as a breeding animal.
Before you get there, you have to think about buying a horse. And that’s where the problems often begin. Because you can’t get a well-trained or even noble pedigree horse for a few hundred USD. It is rather the case that there are hardly any limits to be seen in terms of price. If the purchase cannot therefore be covered by the savings, a loan for a horse could provide the necessary financial means.
There are different variants
Depending on the loan amount and the term of the loan, different sources can be tapped into for a horse loan. If you only need a little money over a short period of time, you can think about whether the overdraft facility could possibly serve as a source of money. It is directly connected to the checking account and acts as a call credit. This means that when withdrawing money, an application does not have to be made in advance, since this was already done when the current account was opened. The overdraft facility usually has an overdraft limit of up to 2 net incomes. Every now and then there can be a larger or smaller overdraft facility. Depending on what was negotiated with the bank.
If the money for the loan for a horse is taken out of the overdraft facility, it must be ensured that a particularly quick settlement is sought. Because the effective annual interest rate for the overdraft facility is very high. Currently, this is an average of 11 percent. So if you do not want interest rates to eat up all efforts to compensate, you should be aware that overdrafting is only the right solution for a loan for a horse if it can be repaid within a very short time.
A second and probably better variant around a loan for a horse can be found in the taking out of an installment loan, which is also known as consumer loan. The biggest advantage of this loan option is the low interest rate and the lack of earmarking. The bank does not have to know what the money from the loan is used for. This avoids a rejection that could well happen if the bank does not see a sensible investment in buying a horse.
The installment loan can be adjusted directly to the purchase. However, we recommend that you not only think of the purchase, but also all other fringe benefits that need to be financially reconciled. This means insurance for the horse and possible transport from the old to the new owner. There may also be a larger veterinary bill that is due for an animal health check before purchase. All in all, therefore, you should always think on a large scale in order to be able to really cover all costs relating to the purchase of a horse with the loan.
Important tips for borrowing
A loan for a horse should only be taken out if the future horse owner can afford the monthly running costs for maintenance. From the stable rental to the feed to the veterinarian, the farrier and the insurance company, several hundred USD a month add up, which will accrue again every month.
In addition, the loan should not simply be taken out at the house bank. If you carry out a comparison and pay particular attention to the effective annual interest rate and the repayment conditions, you will be able to save a lot of money. Because even small differences in the effective interest rate can save several hundred USD in the end.
By the way: the effective interest rate does not only depend on the provider. The borrower can also have a positive impact. For example, if the creditworthiness is particularly good and there is sufficient collateral.