Reply
Regular Contributor
SantaMar
Posts: 117
Registered: ‎03-04-2012
0

possible secure loan advice?

if you are unemployed for the time being and need a vehicle but dont want to dip into savings....a secured loan works?   if you borrow 20k for 60 months with a dealership, you wont be able to sell the car for 20k at the end of the term.  if you secure the note with your own savings you will be paying yourself back and at the end of the term will have your 20k liquid and the vehicle free and clear.  all of this assuming you can spare 20k to be locked up for a bit....

 

why not just cut a check for the 20k?....then you are out 20k immediately and wont be able to get the 20k back.  ever.  you can sell the car but you will take a loss. 

 

at least with a secure loan you can get your 20k back at the end of the term AND sell the vehicle if you wish. is this ass backwards logic??

 

Community Leader
Valued Contributor
HoldingOntoHope
Posts: 1,057
Registered: ‎09-29-2009
0

Re: possible secure loan advice?

Well assuming you can be without the money for whatever period then this is fine.  You would still have the vehicle title from the beginning because the loan is secured by your own money. The loss would be in the interest paid for the loan less the interest earned on your funds. I would assume based on whatever vehicle you are looking at in this price range (especially used) that the interest on the secured loan would probably be less than the interest on a vehicle loan. The vehicle is still going to depreciate no matter how you do the financing so that is a wash.

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

Starting Score: 500's
Current Score: EQ 701 (FICO) TU 721 (FICO) EX 715 (Quizzle)
Goal Score: 760 ALL


Take the FICO Fitness Challenge


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+