How Hard Is It to Finance a Horse Trailer? [Things to Consider]

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Having transport for your horse is essential so you can take them to the vet or move at short notice, but how hard is it to finance a horse trailer?

As a horse owner myself, I know what a struggle it can be to fund all of the expenses associated with them.

Like me, you probably don’t have a large amount of cash on hand necessary to purchase transport and will have to rely on horse trailer loans.

So I decided to look into and put together this guide for other equestrians, so read on!

9 Things to Consider Before Financing a Horse Trailer

A horse entering a horse trailer

When you are ready to take the plunge, you will need to start considering horse trailer financing. It is a good idea to go through everything I mention here before approaching a business to buy your trailer.

It will help give you the best chance of getting the finance that you need. Put together a folder with all the relevant documents and stay organized.

Right, ready? Let’s see what you need to look at before financing a horse trailer.

#1 Know Your Budget

Take a good look at your finances and know how much you can comfortably afford to pay back monthly.

#2 Down Payment

After you’ve looked at your budget, you should know how much you can use as a down payment or deposit on your new horse trailer. If you can, consider a larger down payment.

This will help make the monthly payments more manageable.

#3 Proof Of Income

When applying for a loan for a horse trailer, you will be required to show proof of income. This is often more difficult for people who are self-employed. You will likely be asked to show the previous year’s accounts or tax returns.

#4 Check Your Credit Score

Just like for other major purchases, your credit score will affect whether you are approved for a loan or the rates horse trailer finance companies will give you.

If there are any issues with your credit profile, try to remedy them or prepare to explain them to the financing company.

#5 Shop Around

Don’t go for the first financing option you find. Shop around for horse trailer financing and make a list of the ones that offer the best terms. If possible, choose those that offer the option to pay off your loan early without any penalties.

Also, look for loans that allow you to make extra payments with no extra fees. Check out interest rates to find who has the best deals. If you can find these offers, it means you can go for a loan with a longer term.

That will mean lower monthly payments but leave you with the ability to clear your loan early if you want.

#6 Horse Trailers Are A Luxury

A picture of female standing by her horse

Lenders look at horse trailer loans differently from other purchases and consider them a luxury instead of a necessity. They fall under the ‘recreational vehicle category. 

It is something that many people will get rid of or stop paying for before their car or house if they run into financial difficulties. This means that these types of loans are considered higher risk.

This makes getting a loan more difficult, so be prepared to fulfill stricter criteria.

#7 Debt To Income Ratio

Your debt to income ratio (DTI) will have an impact on if you get approved for a loan and if so, what terms you will get.  If the percentage of this is too high, you might get declined or only offered a higher interest rate.

According to Double D Horse Trailers, a reputable trailer company that helps their customers get finance, the DTI can’t be over 40%. [1]

#8 Shared Credit and Debt

Look into any debt or credit score that can be connected with yours, such as your spouse. If one of you has a poor credit history, it might be better to apply on your own if you can afford to as it is possible you will be denied.

#9 Think Carefully About Co-Signing

It is great to want to help out your child or a friend get their own horse trailer by co-signing a loan for them. However, by signing, you are now considered responsible for the loan.

This means that it will affect your DTI ratio and push it too high, resulting in you getting declined if you apply for a loan for something else. This happens even if the person you co-sign for diligently makes all their repayments.

Of course, part of the things to consider before taking out horse trailer finance is to research quality horse trailers.

Check out this video for more tips on buying a horse trailer.

What Credit Score Do You Need to Finance a Horse Trailer?

Some say that you need a credit score of at least 620 to finance a horse trailer, while Double D Horse Trailers say the score often has to be over 750. [1]

One tip I learn here is to purchase your horse trailer from a business that deals with multiple finance companies. They will have experience with all kinds of credit scores and know which companies are stricter than others.

This way, they can help you apply to the one that is most likely to approve your application. Keep in mind if your credit history has some problems, if you do get approved, it is likely the interest rates will be higher.

Just to note, as it is relevant as to why higher credit scores are now required, the financial crisis of 2008 is why lenders tightened up their criteria for approving loans.

Part of the problem is because of the ‘recreational vehicle’ category mentioned above, instead of seeing horse trailers as a necessity, which they are if you own horses. 

It means finance companies are looking for excellent credit scores and better credit history before they approve a personal loan. If your credit report shows bad credit, it is unlikely you will get approval.

CHECK: OPEN TOP HORSE TRAILER & OTHER TYPES

What Are the Best Horse Trailer Finance Companies?

A horse trailer carrying horses

There are many horse trailer loan companies. The best horse trailer finance companies might be in your local area and only cater to those living in your state, or they could be nationwide.

Here are some of the best options in no particular order. They will have different repayment terms, and some will have a minimum loan amount.

#1 Double D Trailers

Double D Trailers is a reputable trailer brand. If you purchase one of their trailers, they can help organize financing for you. They deal with multiple companies and can try to get you the best terms.

However, they won’t accept an application from those with a bad credit history, as you are unlikely to get approved for loan funding.

#2 GoldenWest Credit Union

GoldenWest Credit Union is based in Utah, and you have to be a resident there and meet other criteria to become a member. 

If you meet the criteria to become a member, they are good options for horse trailer loans. They tend to offer good terms and have no application fees.

#3 Pegasus Finance

This horse trailer loan company is for our UK readers. They are a specialist finance company that specializes in horse boxes and horse lorries, camper vans, and motorhomes. They have lots of great reviews.

#4 Upstart

Upstart is a newer company that aims to make modern borrowing easier. They use AI and different formula than the traditional FICO method of checking your history.

#5 Coolhorse

Coolhorse is a business that sells a variety of horse trailers. They deal with customers nationwide and can organize trailer loans for you.

#6 LightStream

LightStream is a nationwide company that gives pretty good interest rates to customers with good credit.

#7 Highlands Financial

Highlands Financial can be a little less strict when approving loans but expect to get a higher interest rate. They offer all kinds of loans, including for horse trailers.

#8 Southeast Financial

Southeast Financial is for customers living in Tennessee, Kentucky, and Mississippi.

Special Loans to Finance a Horse Trailer

In addition to traditional types of financing, there are two other options you can consider to find the funds to purchase a horse trailer.

Home Equity Loans

If you are eligible, look into a home equity loan to finance your trailer. For this type of credit, you use money from the equity you put into your house.

Often interest rates are better, and if you have a bad credit score, you have a better chance of credit approval. But the loan is secured by your house, so if you can’t repay, your house is at risk.

Home Equity Line Of Credit (HELOC)

Home equity lines of credit are similar to an equity loans. However, it is ongoing credit instead of just one lump sum. It means that you can use what you need when you need it.

Once you have your trailer, you will want to haul your horses as safe as possible. Check out the great trailering tips in this video.

 FAQs

How long can you finance a horse trailer?

Most horse trailers can be financed for up to 10 years or 120 months. However, some will offer a 12-year term.

What is the average interest rate on a horse trailer?

Interest rates on a horse trailer can vary greatly, from as low as 5.25% right up to a whopping  17.95%. The interest rate will depend on your credit rating.

Can you finance an older horse trailer?

man fixing the repo horse trailer

Yes, some finance companies will allow you to finance a horse trailer up to 12 years old. But, some will have a lower age limit.

Do you need a special license to pull a horse trailer?

Yes, you need to have a special license to pull a horse trailer. However, the exact rules will vary from state to state. Plus, there are federal regulations. [2]

Conclusion

How hard is it to finance a horse trailer? It is harder than it used to be due to stricter criteria regarding credit history and score. 

However, many manufacturers and dealers will work with a variety of financing companies and can help you. You also have the option of home equity loans, but keep in mind these have some risks.

Horse Trailer on the road

Have you ever applied to get a horse trailer loan? How did you find the process? Let me know in the comment.

Resources

  • 1. Available from: https://www.doubledtrailers.com/6-steps-to-qualify-for-horse-trailer-financing/
  • 2. Trailering horses in Minnesota: which laws affect you? [Internet]. extension.umn.edu. [cited 2022 Aug 31]. Available from: https://extension.umn.edu/horse-ownership/trailering-horses-minnesota-which-laws-affect-you#driving-in-minnesota-%28intrastate%29-1546463
Siun L
Siun L

Siun is an all-around animal lover, with a passion for horses. She grew up in the United States, competing in the hunters, equitation, and jumpers. Now living in Ireland, she competes with her own showjumping horses. She is experienced in the care and training of horses, as well as teaching riding lessons. She loves to combine her love for horses with her work. When not working, Siun will be found at the stables, rain or shine.
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