Horse Trailer Financing: 8 Things You Should Know

Kelly Boyer SagertUpdated October 12, 2022

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If you’re in the market for a horse trailer, there are a variety of sizes and models to choose from. The type of horse trailer you need, the quality, and how big it is will help determine the price.Horse trailers typically cost tens of thousands of dollars, so you’ll need to decide how to pay for it. Unless you have the money upfront, it may make sense to look into horse trailer financing. There are a number of different financing methods available. Here’s what to know to find the best option for your needs.

What is Horse Trailer Financing?

Horse trailer financing refers to obtaining the funds needed to buy a horse trailer. Depending on the cost of the horse trailer you’re buying, you may decide to tap into your home’s equity, get an RV loan, or use a personal loan to make your purchase.

Typical Horse Trailer Costs

There are two main types of horse trailers. Bumper pull models are the most commonly used type. They tend to be more popular because they don’t require a pickup truck to tow the trailer. You simply need a vehicle with enough towing capacity and a hitch on the back bumper to attach the trailer. On average, this type of horse trailer costs between $15,000 and $30,000. Gooseneck trailers extend over the bed of a pickup truck and attach to a ball hitch in the bed of the truck. They are far more expensive than the bumper pull style, ranging from $60,000 to $150,000. The higher-end models often have living quarters up front. You should also plan on spending $50 to $100 monthly for licensing, insurance, and basic maintenance costs for the horse trailer. And if you’re financing a horse trailer, you’ll need to make monthly installments to pay back what you borrowed. These expenses are on top of paying to care for a horse.

What Can Horse Trailer Financing Cover?

Horse trailer financing is designed to cover the purchase of the horse trailer. It does not cover horse financing (the cost of the animal). If you’re financing a horse trailer through a personal loan, the way you use the funds is typically flexible. However, if you’re getting a loan where the trailer serves as collateral for the loan, check with the lender for specific requirements.

8 Things to Know About Horse Trailer Financing

As you consider financing a horse trailer, it’s important to be aware of the following eight factors:

1. Down Payment Amount

Depending on the type of loan you’re seeking, a down payment may or may not be required. With personal loans and home equity loans, there is no down payment. If you’re buying a horse trailer and using the vehicle as collateral for a secured loan, check with the lender to see what kind of down payment might be required.

2. Credit History

Although some lenders will offer horse trailer financing with bad credit, most have a minimum credit score requirement. They may, for example, want you to have a credit score of at least 620. Be sure to check your credit score beforehand in order to know if you’re well positioned to apply for horse trailer financing.

3. Horse Trailers as Recreational Vehicles

A lender typically considers a horse trailer to be a recreational vehicle when it contains living quarters. If you’re financing a horse trailer with living quarters, you’ll want to apply for a recreational vehicle (RV) loan from a bank, credit union, or online lender that offers this type of financing. Once you’re approved, you’ll sign an agreement that lists the loan amount, the term or payback period, which typically ranges between 10 to 15 years, the annual percentage rate (APR), which is the interest rate with fees calculated into it, and the monthly principal and interest payments. RV loans are typically secured, meaning that the horse trailer serves as collateral for the loan. If you default on the loan, the lender can take your horse trailer.

4. Horse Trailer Budget

Lenders typically use a debt-to-income (DTI) ratio to determine if a loan amount is within your budget. To calculate yours, add up your gross (pre-tax) monthly income and your monthly debt payments (mortgage or rent, car payment, credit card payments, and so on). Divide the monthly debt total by the monthly gross income, and the resulting percentage is your DTI.Typically lenders look for a DTI no higher than 36% when the monthly payment for the horse trailer loan is added into the calculation. Keep that in mind as you’re shopping for a horse trailer to help determine your budget.

5. Financing Rates

It’s important to know the financing rates for a loan in order to get a sense of how much you’ll pay. With a higher rate, you may end up paying more over the life of the loan. According to the Federal Reserve, the average APR for a two-year personal loan in the first quarter of 2022 was 9.41%.

6. Terms of Finance

The “term” of a loan refers to the period of time you have to repay the loan. However a loan’s “terms” (plural) can include all the loan’s terms and conditions, such as interest rate/APR, the length of the loan, fees, and penalties. When you’re exploring horse trailer financing, it’s important to understand the terms and conditions of loan options, and to make sure that there aren’t any hidden fees.It can also be helpful to have personal loans explained in more detail. For instance, a lender may offer you a conditionally approved personal loan. If so, this means that the loan is tentatively approved, based on specific conditions, such as providing the necessary documentation required, such as your income and bank account information. Understanding the loan process can help you as you look for financing.

7. All Lenders Are Not Equal

It’s important to carefully compare different lenders and the loan programs they offer. This includes:

horse trailer financing rates
origination of a loan
fees and penalties
loan term (length) and other conditions

Knowing that information can help you make the right financing decision for your situation.

8. Typical Horse Trailer Financing Requirements

Meeting personal loan requirements of the lender you choose is necessary for getting loan approval. These requirements typically include a minimum credit score, proof of employment and income, and a DTI that’s within the lender’s guidelines. Depending on the type of loan being offered, they may also require the horse trailer as collateral.

Exploring Personal Loan Options

If you’re using financing to purchase a horse trailer and exploring the option of a personal loan, Lantern by SoFi can make the loan shopping process easier. With our online marketplace, you can conveniently compare personal loans from different lenders all in one place to find the one that’s most suitable for your needs.Find and compare personal loan options with Lantern.

Frequently Asked Questions

What are some horse trailer financing options?

How much financing can you get for a horse trailer with living quarters?

Can you get horse trailer financing with bad credit?

Photo credit: iStock/KingWu

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About the Author

Kelly Boyer Sagert

Kelly Boyer Sagert is an Emmy Award-nominated writer with decades of professional writing experience. As she was getting her writing career off the ground, she spent several years working at a savings and loan institution, working in the following departments: savings, loans, IRAs, and auditing. She has published thousands of pieces online and in print.

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