A leading debt advice charity has expressed concern about the “extremely high” rates of interest on loans for horse and lorry purchase offered by a new company.
Euro Horse Finance – with its slogan, “financing the equestrian industry” – is promoting unsecured loans of up to £10,000 with interest rates from 19.9% to 29.9%.
Secured loans with interest rates of up to 13.9% are also available.
Managing director Jennifer Spence told H&H the loans were aimed at “professionals looking to spend in the region of £20,000 to £200,000”.
“These are people looking for a quick turnaround on a horse, who don’t want to tie up all their capital in one animal,” she added.
But a spokesman for the Debt Advice Foundation said interest rates on the unsecured loans from Euro Horse Finance “put them in a similar league to those companies offering so-called ‘payday loans’ [easily accessible credit to keep finances afloat until payday]”.
The spokesman said: “We have warned that these high-interest, unsecured loans are often offered with no credit checks at all and can put customers at serious risk of insolvency.”
According to the debt calculator on the This is Money website, a £10,000 unsecured loan paid back over five years at a rate of 29.9% would end up costing £19,375.
Ms Spence told H&H that she intended to promote the secure loan side of the business more heavily and was recommended by top producers.
Craig Rimell, of Showjump International Limited, based in Birmingham, told H&H that Ms Spence had his full support.
“We sell a lot of upmarket horses and we’ve had a lot of interest – in fact we’ve put an ad on our website so you can click through to Euro Horse Finance,” he said.
“The interest rate is not mega. It just gives a chance for people that haven’t got the money up front for a horse to be able to buy one and pay it off monthly,” he added.
This news story was first published in the current issue of H&H (1 December 2011)