Personal loan against car from Credit Union

[allaboutcredit]

I am planning to get 5k personal loan from my local Tri boro Credit Union. I might pledge my car and the rate will be 2.9 %.

They pull TU and I checked through Walmart CC and it shows 707.

How is this secured loan going to affect my credit score ? thanks !

[haulingthescoreup]

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@allaboutcredit wrote:

I am planning to get 5k personal loan from my local Tri boro Credit Union. I might pledge my car and the rate will be 2.9 %.

They pull TU and I checked through Walmart CC and it shows 707.

How is this secured loan going to affect my credit score ? thanks !

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It will report as installment credit.

If you don't have any open installment credit presently, it might help your score slightly.

You will potentially lose points for the inq, the presence of a new account, and any lowering of your AAoA.

The balance/ CL is not included in the util that we talk about all the time, which is revolving util. Installment util is calculated separately and doesn't affect your FICO scores much, if at all.

eta: if you're thinking about putting your car up as collateral, it sounds like things might be a bit tight. If so, please consider setting aside 6 months' worth of loan payments in savings and only using the rest for whatever your immediate financial needs are. If a financial crisis hits (or worsens), you definitely don't want to fall behind on loan repayments, especially if it jeopardizes your ownership of your car.

--Hope you don't mind me saying this. Having a minor anxious hand-wringing attack here.

[allaboutcredit]

(I do have about 12k in my checking account but dont want to use it. And I also have the car on instalment.)

So what happens to the car title ? Do they take away my car's owner /regn. paper ? The interest rate is just 2.9 %

[llecs]

Your car is paid off, right? If not, you'd likely have to pay it off first before you can pledge it as an asset to your new lender. They need the title so as to put a lien against it and you'd only have the title if the car is PIF. They would or should re-title the car themselves. Your registration would remain the same. I suppose every state can be different.