Wise to take out a loan for a horse?

[Mini Horse Lover]

Hey everyone!

Topic I've been searching the forum for but haven't found a match. I see these farms with fancy horses and high price tags to begin with. I always sit and wonder: Payments or loan? Sometimes you just "gotta" have that horse. Just wondering if it's a smart idea to take a loan out.

What do you guys think? Opinions would be nice. Just pondering this over and over and thought I would ask you guys!

 

[Songcatcher]

Coming from a long line of farmers, my thoughts are, never take out a loan on something that could die.

IF you take out a loan, be sure to have it well insured.

 

[WhiteTailsMinis]

Agree with Songcatcher of course. Even if you make payments on an animal from the breeder, always wise to ensure it for the value so if something should happen you can still pay it off without coming out of your own pocket.

I'm not so sure that a bank or financial institute would loan money on an animal anyway - I'd think if you did a home equity or refi then you don't have to account for what you are using the money for. and heck no I am not at all whatsoever suggesting that as a form of payment - just saying that some folks have a revolving line of credit and don't have to account for what they spend it on.

Most breeders will accept a reasonable deposit and then installments so that would be the best route to go if you don't have the funds up front. Most offer interest-free payments too and not many financial institutes will do that - especially to purchase livestock.

I know as farmers there are programs for livestock and operational loans, but not sure the ins and outs of that.

 

[Kelsey - Vandy's Farm]

Coming from a long line of farmers, my thoughts are, never take out a loan on something that could die.

IF you take out a loan, be sure to have it well insured.

I agree as well. We would never take out a loan to buy a horse. If you have to have an expensive one save up. There will always be horses for sale

 

[joylee123]

Hi there, Years ago I took out loans through the bank on four horses. They were all insured and the bank held their registration papers till the loans were paid off. Back then the town I lived in was rather rural, it still is but now with a larger town feel, Don't know if they'd do it now or not. Worked well for me and allowed me to get my start in miniatures

Joy

 

[Katiean]

I would see if they had a payment plan. I did take out a very small loan to buy 2 breeding Japanese Chins. The loan paid off in 6 months and had very low payments. I do not think you are talking a loan as small as I got. No, I would see about a payment plan or keep looking.

 

[LindaL]

Payments with the owner is best. I wouldn't have most of the horses I have without payments...lol

Not only do I not think banks would loan for live stock (I could be wrong...lol), but...if something were to happen and you could not make the payments (loss of job or whatever), you STILL need to make the payments and if you don't, your credit can be affected.

At least with a payment plan with the owner, if you could not pay, the owner could take the horse back and you would just be out the money paid into it, but your credit would not be affected.

(Just thinking of different scenarios for you...

)

 

[txminipinto]

Never take out a loan on something that can die or get sick. Its just asking for trouble. Many owners are willing to take non-refundable payments.

 

[sfmini]

I took out a signature loan to buy my Billy Idol daughter and have no regrets. I have full ownership of her and have her papers and would still owe the money should something happen to her.

She is very worth it to me!!!

 

[drmatthewtaylor]

Loans are taken out for animals all of the time. Whether something could die or not is not a reason to decide to invest in it or not. All sorts of animals are bought with loans including pigs, dairy cattle, beef cattle and horses of many disciplines.

Now, bad business decisions are made every day. I would not encourage anyone to spend more money on their hobby than what they can afford. If it isn't a hobby, but rather a business, then the up side needs to be there and you need to be right.

Don't insure a hobby, there is no economic loss. But, if its a business and losing this individual would cause you financial hardship, then I would encourage insurance.

The most consistent mistake I see is people who call it a business because sure they would like to make money, but then make decisions like its a hobby. You don't get it both ways.

Dr Taylor

 

[kaykay]

The most consistent mistake I see is people who call it a business because sure they would like to make money, but then make decisions like its a hobby. You don't get it both ways.

Loans are taken out for animals all of the time. Whether something could die or not is not a reason to decide to invest in it or not. All sorts of animals are bought with loans including pigs, dairy cattle, beef cattle and horses of many disciplines.

So true!

 

[Shari]

I have borrowed money to buy horse's. Short term loans with a low interest rate.

Much rather do that, than pay a breeder monthly for a horse. That way I own it out right.

( and after having a couple of very bad buyers, I will not take payments for any animal I sell. It is the buyers responsibly to come up with the money or not. Nor do I want to take care of and pay for board, while they are making payments, like so many people want.)

 

[CZP1]

Why not? You take out a loan for a car and God forbid you get in an accident. But you have insurance. I have made payments to the breeder but it had to be insured. I would think if you are going to take out a loan have the horse insured. As everyone has said on here.

 

[Seashells]

Loans: May be tempted to take out a loan for a horse, but would never will do it. I think: I'd be paying loan payment, plus paying out everything for horse, for example feed, trimmings, tack, housing, plus possible vet bills, plus intrest on the loan!!!

Payments: I would put a deposit on a horse, but have it paid off within a week or two. That way, it's done fast, the horse is mine and I can take off from there (no dark cloud over my head).

Best: I prefer paying in full at the time of purchase. I don't like debt.

 

[Boinky]

As a business Yes I probably would IF it was truly a good investment and I felt I could pay the bank loan off. Now on the other hand if it's really more than you can afford and will be paying off the animal for the rest of your life..probably not!! I think I heard on the news a month or two ago that Kentucky was no longer allowing loans on Horses. I guess a lot of people in the Racing industry were defaulting on their loans and going bankrupt I think the market right now is so poor it might make banks second guess giving out loans to everyone for horses. From that perspective for the bank it's not a wise investment to loan their money they are likely to lose. I think it really just depends on your bank and just how much your asking to borrow an what kind of business turnaround profit you can show you could make from that large loan (if your going for a large loan that is).

 

[Michelle@wescofarms]

I could see getting a loan if it's a horse that will truly take your breeding program to the next level and you're treating your breeding as a business.

If it's a hobby no.

If it's just coveting a horse with no real need/use for it, no.

One of the best ones ever Dr. Taylor

"The most consistent mistake I see is people who call it a business because sure they would like to make money, but then make decisions like its a hobby."

 

[Miniv]

I could see getting a loan if it's a horse that will truly take your breeding program to the next level and you're treating your breeding as a business.

If it's a hobby no.

If it's just coveting a horse with no real need/use for it, no.

One of the best ones ever Dr. Taylor

"The most consistent mistake I see is people who call it a business because sure they would like to make money, but then make decisions like its a hobby."

DITTO DITTO DITTO.

 

[Field-of-Dreams]

Most people do take terms, you could see if they would do that. But I probably wouldn't do a bank loan if I could avoid it.

In today's economy, however, if you have the cash up front and could pay in full they may take less. A lot less in some cases! I know WE would- so it wouldn't hurt to ask!

 

[iowa]

It also depends on what you are going to do with the horse. If it is for breeding and selling the resulting foals then a higher price for an animal with the right bloodlines might be justified. (Although I have seen people pay $18,000 for a mare and couldn't sell the foals for $500.00) If it is for showing, then look around carefully and you can find very nice show quality animals at a reasonable price if you have an eye for conformation.

 

[Mini Horse Lover]

I am not the one who wants to take out a loan. I just see farms with horses that I'm sure were pretty pennies and I just think. Okay how did you manage that? Like when I used to raise Arabians. I scraped by and others had million dollar horses and were buying and selling all the time.