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Valued Contributor
Posts: 1,980
Registered: ‎08-02-2016
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Personal Loan to then Loan to Small Business

So I would like to get a personal loan for about $10,000 (to be PIF in under a year). The loan's primary use will be to pay off business credit cards which are going to otherwise charge 18%+ interest.

Here's how:

Apply for Personal loan, FICO is 720-730, use the PL to then in turn Loan the money to my small business to pay off the business cards.

Since the business is under 2 years I can't really apply for a Small Business Loan, even with a good personal FICO Score. In the last 2 months business income has stabilized so I'm 99.99% certain it will be paid within 6 months. I'm looking for a rate of 8% or less, I haven't really seen any other viable options.

What are your thoughts on this?

Also these are the PL's I've seen:

https://www.nerdwallet.com/blog/loans/personal-loans-good-credit/
Regular Contributor
Posts: 246
Registered: ‎07-19-2017
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Re: Personal Loan to then Loan to Small Business

Discover and Amex personal loans start at 6.90%

Give those a look before the ones on Nerd Wallet. I've seen people apply to Prosper with good credit and still get a high APR.


FICO 08 (Sep 2017): EX 657 / EQ 660 / TU 683 - Gardening until 04/30/18!
Valued Contributor
Posts: 1,980
Registered: ‎08-02-2016
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Re: Personal Loan to then Loan to Small Business

I was looking at the loan by Earnest. Amex has been not really good to me, and I used the Discover tool it estimates 13% for a 720 FICO Score for 10k. I just don't want to waste a HP for nothing Smiley Sad Also literally just opened a CC with Discover last month so they'll be like we just gave you a CC now you want a loan too?
Regular Contributor
Posts: 246
Registered: ‎07-19-2017
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Re: Personal Loan to then Loan to Small Business


Matt4200 wrote:
I was looking at the loan by Earnest. Amex has been not really good to me, and I used the Discover tool it estimates 13% for a 720 FICO Score for 10k. I just don't want to waste a HP for nothing Smiley Sad Also literally just opened a CC with Discover last month so they'll be like we just gave you a CC now you want a loan too?

Sorry about Amex! I've investigated and almost accepted ones form BestEgg, Sofi and Upstart. My TU FICO 08 at that time was 690 and they were offering me 10-15% APR, but I didn't go through with it. I only needed $3k and just decided to pay it myself. These lenders offer 5% APR for people with better scores like you.



FICO 08 (Sep 2017): EX 657 / EQ 660 / TU 683 - Gardening until 04/30/18!
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Valued Contributor
Posts: 1,980
Registered: ‎08-02-2016

Re: Personal Loan to then Loan to Small Business

Hmm thank you for the advice Smiley Happy I'm still thinking what might be the best way to go for our situation.
Epic Contributor
Posts: 29,435
Registered: ‎10-23-2007
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Re: Personal Loan to then Loan to Small Business

We used several personal loans for our small businesses.

Sofi is by far the lowest interest rate and loans the largest amounts.

Avant was next largest amount

Loanme

Loandepot

Navy Federal if you have access has brought rates down.

 

Pretty much all of them you can hit up for pre-approval on the amount and APR with SP and then they HP if you move forward to apply.

Valued Contributor
Posts: 1,980
Registered: ‎08-02-2016
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Re: Personal Loan to then Loan to Small Business

Actually just got in some BT checks from my personal account. It has a 12k limit only used $100.

3% BT Fee but can use the checks for anything.


What are your thoughts on using this for the 10k?
Epic Contributor
Posts: 29,435
Registered: ‎10-23-2007
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Re: Personal Loan to then Loan to Small Business

I would hate to take business credit over to personal, what about a new business credit card with balance transfer?
Or at least see about big credit line increase on personal before you take the full $10k
Valued Contributor
Posts: 1,577
Registered: ‎06-05-2015
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Re: Personal Loan to then Loan to Small Business

If you're going to pay the $10k off for sure in a year, why not do the check's BT. Remember it will cost you $300 for the BT.

 

If i had the option of getting a local credit union loan for $10k at 5% or less (just an example) i would do the BT check, ONLY IF i knew for a fact i would pay all that off in 12 months or less.


Valued Contributor
Posts: 1,980
Registered: ‎08-02-2016
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Re: Personal Loan to then Loan to Small Business

Well it's that for a small business loan EVERYONE wants 2 years, and those who don't have really high rates even if the guarantor has an excellent FICO.

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