Thinking about financing a dog? What you should know before you do

What you should know before taking out a loan
Posted at 2:56 PM, Aug 09, 2018

Buying a designer dog is pricey, so now, people are turning to financing options to pay the high price tags. However, these financing options could come with even higher costs.

That's what one woman, Victoria Caruth. came to learn. She fell in love with Duchess, a Yorkie.

The dog came with a hefty price tag of $1,600. Caruth couldn't afford it, but the pet store offered financing, so she accepted their offer.

When Caruth got home with Duchess, her husband asked to see the paperwork.

The paperwork revealed Caruth had agreed to lease her dog for two years with interest, paying almost triple the original price of the dog.


"And at the end of it, you either give the dog back or pay a lump sum of almost $300, says Caruth.

"I would never give her back you know. So of course, I'm going to pay that lump sum."

Caruth’s story is a cautionary tale that prospective owners should be aware of before agreeing to any financing option.

"I would stress to any borrower, know before you owe,” says Jenifer Waller, COO of the Colorado Bankers Association. “Read the fine print."

Loans can come in all shapes and sizes to help meet the needs of the consumers, but some loans aren't the most practical and could end up costing you a lot of money.

"Read the documents; ask questions and shop around,” suggests Waller. “Make sure you're getting a product that meets your needs."

She says there are some common terms to look for, including lease and APR. A lease means you're paying for the right to use something, but you'll have to give it back at the end.

A loan is financing to own an item. The letters APR stand for annual percentage rate, which is how much you're paying for financing.

A 20 percent interest rate is high, when you compare it to a credit cards which average around 16 percent and student loans that are 7 percent. Homes loans are less, averaging around 5 percent.

Waller suggest some key things to search for when you're looking at a new loan.

"You want to pay attention to is your interest rate, your monthly payment. Is there a balloon payment meaning a larger payment at the end of the loan?"

Most importantly, when faced with a cute puppy, Waller suggests never making a financial decision based on an emotional response.

Caruth learned her lesson the expensive way. But despite the high price, she says Duchess is her new best friend.