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How Can You Finance a Horse?

Horse Financing - What Are Your Options?
Lauren Ward
Lauren WardUpdated October 16, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you’d like to buy a horse but can’t afford to purchase one outright, it is possible to get horse financing. In fact, financing a horse, including taking out a horse loan, is more common than you may think. Here’s what you need to know about horse financing options.  

How Do Horse Loans Work? 

Loans for horses fund the purchase of a horse. Like other loans, once a horse loan is disbursed, borrowers make regular monthly payments until the loan is paid off.Getting a loan for a horse can be helpful because horses are costly. A horse bought for recreation ranges in price from about $2,000 to $8,000, while a show horse costs around $20,000 to $50,000. 

Is a Horse Loan the Same as an Equine Loan? 

Horse loans and equine loans are the same thing. No matter what it’s called, either of these loans for horses can be used to finance the purchase of a horse. 

Financing Options for a Horse

There are several different options for financing a horse, including:

Personal Loan 

There are many reasons for getting a personal loan, and buying a horse can be one of them. Personal loans are versatile and can be used for a variety of purchases.  With a personal loan, you’ll get a lump sum of money that you pay back monthly with interest. Borrowers can choose different types of personal loans, including:
  • Secured or unsecured loans
  • Fixed or variable interest
  • Solo or cosigned loans
There are pros and cons of personal loans you should be aware of to make sure this form of financing is right for you. Recommended: How Much Can You Borrow With a Personal Loan?

Horse Rental 

Instead of paying for all costs associated with horse ownership, you may be able to rent a horse. This is a good option for anyone who wants to ride a horse from time to time, but doesn’t want to cover the horse’s potential needs and costs. Typically, you can find short- and long-term horse rental arrangements.

Sharing Ownership 

Another option is to share the cost of purchasing and caring for a horse with someone else. One drawback to shared ownership is that if the co-owner becomes unable to contribute to the horse's maintenance costs, you may end up paying for it all yourself. 

Credit Cards 

Using a credit card to finance a horse purchase could make sense if you have a card with a high enough credit limit. However, credit cards have high interest rates, and if you’re unable to pay off the balance by your next statement, you will likely end up paying more in interest than you would with other financing options.If you have strong credit, you may be able to qualify for a credit card with a 0% introductory APR. As long as you pay off the entire cost of the horse before the introductory period ends, you won’t owe any interest. Recommended: What Can Increase Your Credit Card’s APR?

Loan Terms for Financing a Horse

The loan terms for financing a horse will vary depending on the lender and the borrower’s credit profile. All lenders look at the following information to determine a loan’s terms:
  • Credit history and credit score
  • Income
  • Debt to income ratio (your gross monthly income compared to your monthly debts)
  • Loan amount
The loan’s terms, including the length of the loan and the interest rate will affect the total cost you pay as well as the monthly payment amount. 

Pros of Using a Personal Loan to Finance a Horse Purchase

  1. All types of borrowers can qualify. Personal loans are available through different lenders, some of which specialize in working with borrowers who have low credit scores. This means that regardless of what your credit score is, you may be able to get a personal loan large enough to fund your horse purchase.
  2. You don’t have to dip into your savings. It’s a good idea to keep enough money in your bank account to cover any potential emergencies. By taking out a personal loan, you’re not using those funds. 
  3. Better interest rates than credit cards. Credit cards traditionally come with higher interest rates than personal loans. If you don’t qualify for a 0% intro APR card, financing with a personal loan may save you money. 

Cons of Using a Personal Loan to Finance a Horse Purchase

  1. It is unnecessary debt. A horse is a luxury purchase. Make sure you can afford to pay back what you borrow.
  2. It will increase your debt to income ratio. Taking on debt can negatively impact your debt to income ratio. That could hurt your chances of being approved for and/or getting a good rate on future loan products like a mortgage or car loan.   
  3. Late or missed payments can damage your credit score. If you are not able to make all your monthly payments on time, your credit score could take a hit. 
Pros of Using a Personal LoanCons of Using a Personal Loan
There are lenders for all types of credit profilesA horse is unnecessary debt
Can make the purchase without dipping into savingsIncreases debt-to-income ratio

How Do You Use a Personal Loan to Finance a Horse? 

To use a personal loan to finance a horse, you must first apply for a loan with a lender and be approved. Once you have received the money, which usually happens fairly quickly, you can use it to purchase the horse. You’ll then repay the loan over time in fixed monthly installments.Recommended: Horse Trailer Financing: 8 Things You Should Know

Applying for a Personal Loan for Financing a Horse 

When it comes to applying for loans for horses, the process is the same as with any other personal loan. First, you fill out a loan application. After that, you may be asked to submit additional information, such as: 
  • Proof of identity
    • Driver’s license
    • Government issued ID
  • Income verification paperwork:
    • Tax returns
    • Pay stubs
    • Bank statements
  • Proof of address:
    • Bank statements
    • Utility bill
    • Proof of insurance
If your loan is approved, you’ll need to review and sign the documents sent to you, which will include a loan agreement. Read everything carefully. If you have any questions, contact the lender directly to speak with a loan officer before you sign.  Recommended: What Does Conditionally Approved Mean for a Personal Loan? 

Compare Personal Loan Rates With Lantern

Horse financing can help you afford the cost of a horse, and borrowers have a few different options to choose from. If you’re exploring personal loans to finance your horse, you’ll want to shop around for the best terms. Lantern by SoFi can help. By filling out one simple form, you can easily compare personal loan rates from multiple lenders in our marketplace to find the right option for your needs.   Apply for a personal loan today with Lantern.

Frequently Asked Questions

Can you finance a horse?
Can you use a personal loan to finance a horse?
What are the loan terms for financing a horse?
Photo credit: iStock/DianaHirsch

About the Author

Lauren Ward

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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