Loan for the Horse 2019 – Financing with installment credit
January 1, 2019
Credit for the horse: That sounds like luxury, funded by borrowing. In general, the prices for a leisure horse are at a high level. However, those who have been riding with passion for years and who know exactly what a horse is in terms of costs and work, and who are determined to fulfill their dream of owning a horse, can afford a considerable amount of financing with a loan for the horse, As with all loans, the borrower should have a good, regulated and, for the foreseeable future, secure income in order to be able to repay the loan and withstand the horse’s costs. But even those who already own a horse may need additional short-term financial injection in the form of a loan, for example for a stable, new accessories or unforeseen veterinary costs. What is important to note and when it makes sense to borrow is the subject of this article.
1. The dream of owning a horse
Riding as a hobby is one thing, a horse is something completely different. If you are only interested in riding as a sport and leisure activity, you can easily share or rent a horse. But for true horse lovers, a horse is much more than a sports device. It is a companion, friend and faithful companion and is in no way inferior to a dog – only that it is not allowed into the house. Especially: They are absolute characters, in which each individual has his own personality and reacts very differently to different people and environments. Accordingly, horse and rider build a very close bond over time, based on mutual loyalty and trust.
2. Cost of the horse
The purchase of a horse is much more complicated than that of a dog. And complicated means first and foremost more expensive. Prices start in the upper three-digit range. And these are just the costs for the horse itself. In addition come medical bills, accommodation, food and care. A horse needs a lot of exercise, grooming and regular cleaning of his stable. Anyone who can not reliably afford the time for this must use appropriate services and incurs further costs. All in all, the fulfillment of the horse dream requires several thousand euros.
A loan for the horse can be helpful if the savings are not enough. Thus, the desire can be fulfilled earlier, for example, in a phase of life in which plenty of free time is available or your own physical fitness still allows frequent rides, which later may be harder. With a stable initial financial situation, a loan can make sense.
3. Loan for expensive maintenance
If the dream of the horse is felt, the monthly costs remain high:
- Rent for the stable
- Costs for the care, possibly services of third parties
- Cost of the horse feed
- Travel expenses from and to the horse
Stable rental, care, food, medical expenses and possibly travel costs läppern neat. Even the best planning can get into a whirlwind. Basically, a loan can be helpful for bridging. However, the horse owner should first consider whether he can get the regular maintenance costs for the foreseeable future under control. If the monthly expenditure is too high, a loan can not change it. On the contrary, it increases the monthly costs and can put the debtor in a difficult position. Accordingly, the prospect should first consider whether there will reliably be more income available in the near future.
However, if the horse owner knows that he will soon have more monthly money available and only needs to cover it for a short time, a loan makes sense. If the bank can credibly prove its financial position and ability to repay it, it will usually agree to lending. Thus, food and stable can be paid in the future.
The only alternative with too expensive maintenance of a lack of higher income prospects would be a sale or the division of the horse. This hurts every horse owner, so this step is a big and difficult decision, which is worth averting with as much energy as possible. The problem with a horse as a living and feeling being is that maintenance costs can not simply be reduced for a while. The needs of the animal are not based on the purse of its owner. So that your own darling can continue to bite into the sweet apple, the owner must sometimes bite in the sour.
4. Credit for additional purchases
A horse is a great thing. The property alone makes one proud, with the close social connection to the animal. Nevertheless, in order to fully enjoy the free time with your own horse, some purchases are necessary. Others may not be necessary, but a significant asset. Additional needs may be, for example:
- Medical expenses in case of illness or injury to the animal
- Saddle and riding accessories
- Construction, purchase or renovation of a stable
- Car trailer for horse transport
Little postponement or bargaining power can cause illness or injury to one’s own horse. The veterinarian usually has to be paid immediately. Although insurance can curtail costs in this case, if any, additional costs will be incurred, such as transportation or special feed requirements. Disruptions to equine health occur suddenly and usually unforeseen, so they can quickly break a sensitive hole in their own budget and make a cash injection necessary. Here a loan can be a good way to get this injection without having to completely change your own budget.
Equestrian accessories like a new saddle are certainly less urgent than upcoming medical expenses. Nevertheless, a loan can also be a good choice, because after all a horse should be ridden. For this the rider needs appropriate equipment. A good saddle is important for both horse and rider. The latter feels with a good saddle a significantly better grip and more comfortable. The animal, on the other hand, can even injure or at least have pain in a badly sitting or manufactured saddle. Thus, should not be saved at the wrong end in the equestrian equipment. Of course, high-quality equipment costs money, because high three-digit sums or more come together quickly. If the savings are not enough, a loan can help.
4.1 Stable and trailer
A much more expensive investment is a separate stable. For the at least horse owners a completely own stable is really useful, since it costs a lot of money and horses need as herd animals society of conspecifics. Also, the environment must fit into a stable, it must not be too urban, but must also be easily accessible. To rent a stable of a riding association proportionally is therefore usually the better alternative. Nevertheless, the purchase or construction of your own barn can make sense in some cases. For example, anyone who owns not just one horse but an entire group can become more independent of third parties and hire costs. Some also think of joining up with other horse friends to share their own stable with them.
The own stable needs a good planning and stable financing. As with any property, borrowing is a common way to build it without waiting for years. The costs are paid monthly in installments and can be planned better. Especially when several horse owners get together, the desire to own their own accommodation for their own animals is quite realistic. It does not matter if borrowers choose to buy an existing barn or build a new one.
Also, the renovation of a stable that is already in its own possession can be well, solidly and predictably financed with a loan.
Children often enjoy motorways and highways at the sight of horse-drawn carriages, wondering if they are empty or have animals in them. Even for horse owners, a private car trailer may be useful – or a necessity. To a certain extent, a horse allows his or her own mobility, but of course not always to the extent that one wishes to travel with the animal. The beauty of horses is that, as migratory herd animals, they cope well with new environments and relocations. The horse can be a real enrichment on vacation. In native areas, the horse’s mobility is also important, for example, to perform barn changes or to transport the animal to a doctor or an event. Although transports can be ordered, with frequent need the independence and saving of own horse trailer are strong arguments for the purchase. That they are not cheap, of course, is another matter. But the big gain of having your own trailer can count on the cost savings over time. Or even with the new or expanded possibilities represent such a big gain that the purchase is more than worthwhile. Borrowing from a bank can also be a good way to quickly fulfill this wish and pay monthly installments with a financial plan.
5. Requirements for a loan
To get a loan for the horse, the prospect must meet some conditions. It does not matter whether it is about the purchase of a horse, the financial support for monthly maintenance costs or additional needs such as medical expenses: For the bank, the certainty is important that the debtor repays his loan reliable.
If a horse is financed by a installment loan, the usual credit conditions and credit conditions apply.
These are first:
- Age of the borrower
- Checking account at a bank in Germany
- Official registration address
To convince the bank of its creditworthiness, every borrower should:
- have a good credit rating, which does not necessarily have to happen via the Private credit
- have a demonstrable fixed monthly income,
- To bring property or other property as collateral.
With the credit rating, the bank checks whether it considers the credit applicant a reliable repo provider. This is usually done through the Private credit, but there are also lenders who do not just follow the Private credit. Previous loans that have been repaid, regular income and a permanent job provide the necessary credit.
The monthly income that can be planned is also important in order to demonstrably repay the loan. Without own income it will hardly be possible to get a loan. Possession can serve the bank as collateral, such as real estate or your own horse when it comes to additional purchases.
Tip: If your income is too low, placing a guarantor can provide you with the required loan funds. This also applies to the case of negative SCHUA entries. The guarantor must ensure the necessary creditworthiness.
6. What are frequent financing errors when buying a horse?
Mistakes are not so rare when financing a horse purchase. These turn out to be really expensive. These are the most common mistakes:
6.1 Financing via the credit line:
If equity is available, the entire purchase price does not have to be financed. It happens that the horse friend covers his current account for own funds procurement. That’s not clever, though. Interest rates are high and a installment loan is much cheaper. If a quick repayment is not possible, should be put on a consumer loan. With him, the interest rates are considerably lower and the repayment is plannable.
6.2 Additional costs are underestimated:
A horse has its price. This is not exhausted in the purchase alone. Transport and maintenance are also to be considered, which will result in considerable costs. Many a horse lover calculates with too little credit. It will not be long before it gets financially tight again. Especially if a favorable installment loan is available, the loan amount should be generously calculated. Special repayments can make the repayment term and the overall credit costs cheaper.
7. Conclusion: take into account maintenance costs for the loan for the horse
There is no shortage of loans with favorable interest rates in Germany. Prerequisite for this is a positive Private credit: Without Private credit, loans may be available abroad, with interest rates far less favorable. A guarantor could improve credit quality and optimize interest costs. When comparing the loan offers, the effective interest rates are the main factors. Online credit calculators make it easy and fast to calculate a loan request. The burden of the monthly loan installments also includes the maintenance of the horse. Here, questions such as own barn or rented stall place play a role. How is the supply of the horse secured? There are also costs for food and veterinarian. A list of all costs provides an overview of all invoices to the horse owner.