1. I'd be very hesitant about using one of my vehicles as collateral. As I'm sure you're already aware, if you default, you not only ding your credit in a major way, but lose the car as well.
2. More than likely this loan would be coming from a lender that is considered a consumer finance account which is another con (negative)
3. At 35% and a term of 60 months, that's roughly $320 per month, but the kicker is that interest, making your payback over 19k
4. Do you really have to have a shed and an E scooter? If not, going with the lower loan amount would be much better if you just have to have something right now.
5. You said you have a large settlement coming, if that will wipe out most, or all of your CC debt. I'd do everything you can to avoid borrowing any more money at all until that was settled, second job, etc... but I understand you find yourself in a hard spot, wish you nothing but the best.
@JoeRockhead wrote:1. I'd be very hesitant about using one of my vehicles as collateral. As I'm sure you're already aware, if you default, you not only ding your credit in a major way, but lose the car as well.
2. More than likely this loan would be coming from a lender that is considered a consumer finance account which is another con (negative)
3. At 35% and a term of 60 months, that's roughly $320 per month, but the kicker is that interest, making your payback over 19k
4. Do you really have to have a shed and an E scooter? If not, going with the lower loan amount would be much better if you just have to have something right now.
5. You said you have a large settlement coming, if that will wipe out most, or all of your CC debt. I'd do everything you can to avoid borrowing any more money at all until that was settled, second job, etc... but I understand you find yourself in a hard spot, wish you nothing but the best.
This is the correct advice, but I'd strongly suggest not getting the secured loan, shed and scooter.
@acercode wrote:I applied for a personal loan because I wanted to consolidate my cc debt and hopefully increase my FICO score so I can qualify for an auto loan. I was offered two choices: an unsecured loan for $4000 @ 35% APR or a secured loan for $9,000 @ 35% with my car as collatoral. Before anyone says APR is too high, I was about to apply for pre-settlement funding which is much worse. The unsecured loan would help payoff cc balances only but the secured loan would allow extras like a storage shed and an e-scooter.
So anyone have experience with secured or unsecured personal loans and want to warn me? I am worried about putting my car up as collatoral but I do have a large settlement from an auto accident coming just not sure when.
Stay far away from either of those loans.
I agree with the other posters, I'd try to wait for that settlement if you can and avoid either of those loan options. Especially the secured loan.
Especially as you mentioned wanting to get an auto loan soon, may not be the best choice to get a 35%apr personal loan shortly before an auto loan.
I understand the hardships tho and wish you the best of luck! In many circumstances it's not advisable to take out (especially high APR) debt to pay other debt.
Starting Score: 580s
Why not a regular debt consolodation loan like Best Egg or prosper to name a couple. I think they have pre-qual too. Settlements can take yrs.
