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New Member
Posts: 3
Registered: ‎10-22-2013
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Personal Loan

I'm looking to get a personal loan from my local credit union for $4,000 to purchase a motorcycle. When speaking to the representative she told me that they would essentially have to do the loan as a "token" loan, which means that they use the motorcycle as collateral (since they don't do motorcycle-specific loans). Here's the problem: my credit is shot... my FICO was 503 the last time I checked and I'm about 99% sure it's because I let a credit card be charged off (stupid, I know). I told her that I plan to pay off the charge-off this week or early next week (which I do) and I think that's the only negative mark on my account, aside from hard inquires and an old collections account that was paid off ages ago.


Do you think it will be extremely difficult to obtain a loan for the motorcycle? It's valued at around $5,000-$5,500 and I'm asking for $4,000. I currently make an average of $12,000 per year (working 2 years, tax returns were filed as a small business so they have to divide the total $ amount by 2 to get the average). I'm currently paying $310.00 per month on a car loan, but that's the only bill I have as I live with my parents. Unfortunately that car loan hasn't helped my credit because it's a buy-here-pay-here dealership and they do not report to credit agencies.


Is it likely that I would require a co-signer? My mother, the last time we checked, had a FICO score of around 623.

Valued Contributor
Posts: 1,057
Registered: ‎09-29-2009
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Re: Personal Loan

Welcome to the forums. I think you will find that if you spend some time here you will gain a lot of knowledge in how the credit world works.


I hate to be the bearer of bad news but in my opinion I do not think there is any institution which is going to accept this loan. You are looking at a very low (poor) credit score and a limited income. If you mean that you are also self employed (taxes filed as a small business) then this is just another barrier. You really need to look at from the angle of if you were the lender would you put your money at risk? Your collection account and credit card chargeoff unfortunately do not exhibit a willingness to pay the debt. The financial situation calls into question the ability to pay.


I don't mean the above to be harsh but before you consider a loan like that you need to take steps to demonstrate better credit behavior. Your best bet would be to find a credit union or bank that will offer you a secured credit card or secured (by savings) installment loan and build a positive history. When your credit scores have substantially improved (mid 600's) then you might be able to get the loan you are after. It really doesn't take as long as you would think to rebuild good history but it does take diligence. Good luck to you.

Best financial advice I ever got: "Just imagine what an adult would do and do that."

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New Contributor
Posts: 96
Registered: ‎09-04-2012
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Re: Personal Loan

It's too bad no one offers semi-secured loans. You know a loan that say gives you 150% of your deposit. There are some things you just won't be able to use a secured card to do and even most of them won't bump your limit to 150% until you've had it a while. And most people don't have anything other than cash to secure a loan with

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