Serious question in need of serious replies only


#1

Ok so you all know that I lost my driving job which I depended on thanks to my 25 hour a week job at Ingram. Friday is my last day and I’ll soon be starting a job where I’m guaranteed hours and as much overtime as I can handle during the summer.

Anyway, I’m tired of swimming in debt. I pay out 1100 every month to random companies and I’m tired of doing it.

I have three bills that I know I can consolidate with a loan, but my problem is that I already have the loan on the car which I’m paying out.

My questions to anyone who’s dealt with financial institutions or worked for one are as follows.

  1. Would it be possible to add money to my current auto loan and extend it out another year to keep the payments the same?

  2. Would it be possible to get a second free standing consolidation loan and pay it separately from my auto loan?

My concern to #1 is that its an auto loan, meaning I wouldn’t be able to borrow anymore equity against it seeing as how auto’s depreciate and that negative equity wouldn’t allow me to borrow any more money.
My concern to #2 is that I already have a pre-existing loan which is still being paid upon for the next four years. Having the pre-existing loan would cause me to be denied for this much needed payoff.

Any suggestions?


#2

i dont know much about loans… i heard something about car loans on suze orman but i forgot (sorry james). hopefully booze the business man will chime in.


#3

I was going to consider doing the consolidation thing or even refinancing the car but I just couldnt justify all the extra interest. I decided to stick it out untill the car is paid off and go from there. That was about 3 years ago, now we only have untill August left to pay on the car and it was worth it to me. If I were in your shoes Id at least wait untill you have a chance to see how things work out with the new job and all the extra hours.


#4

That’s also something else I should mention, there’s no possible way to refinance the car loan unless I go to another bank and get the pay off for my current loan. I don’t want to do that because I have been with this place since before I even had a job. But if I do that, then I could easily get a free standing consolidation loan through my current bank.

edit: The thing here is though, I cannot wait to see how the job is going to turn out. I’m going to like it or hate it. Either way I have to stick to it, because it’s the end of the month and my bills are going to start piling up. I have a 53 hour check from Ingram coming, and it’s not going to pay for didly shit. My rent is already a day late, and it’s going to take most of my check.


#5

Another thing I just remembered:

#3: Would it be possible to get a free standing consolidation loan to cover my car and my other bills I want to pay off?

I’m wondering if that’s possible to do since then the bank would lose the rights to my title even though I’d still have the money outstanding for the car.


#6

Well, if your sure you can’t stick it out and pay the loans off at the original contracted agreement, then a consolidation loan comes in handy. But remember this, a consolidation loan will have set up fees and a high interest. Sometimes the rates are as high as credit cards. Also, it looks bad on your credit report to future lenders because they look at you as a guy that can’t keep your agreement and they lose money. Companies that offer consolidation loans play hardball with your original lender when they pay off you old loan and do what ever they can to get a lower payoff that goes in their own pocket. That’s why lenders don’t like them. Now if you just go out and get a personal loan to payoff your loans, then that’s fine, but you really don’t have any collateral for a personal loan.

Now if you just need time, most auto loan companies will let you pay interest only and tack the principal on the end. If you call your lender and ask for 6 months of interest only, they will either say ok, or give you a lesser time. Try that first. I don’t recommend a consolidation loan.

Talk to Joe about this. That’s what he does for a living. I’m the guy that goes to guys like Joe, to get people financed when they are buying a swimming pool.


#7

[Italian Accent] BTW Booze, if you don’t have my money by Friday Im cutting off a pinkey finger [/Italian Accent] … ahem… ok back on subject…

Booze gave you good advice about consolidation. Now, back to your questions. Borrowing money against your car comes down to how much its worth vs what you owe on it. Most banks will lend alittle more than loan value, assuming its your Honda… with good credit you should be able to borrow around $1000 or so more than loan value. Your bank could refinance your loan just as easy (actually easier) than you could at a different bank assuming you’ve got a good pay history with them. Theirs also the option of a second lein, whereas someone lends you money as a separate loan using your car as collateral. 2nd leins come with higher interest rates but may be a way to get the money you need assuming you’ve got some equity in the car.

At your age your almost certainly going to need collateral to get any kind of loan over a few hundred bucks (which you could get from small loan companies).

shit I’d type more but I gotta go for a bit


#8

When I was 18 I got a loan through this bank for 1000 dollars and had it paid off one month early.

I’m going to need at least $3600 for this second loan. :o

I’d rather pay a 6-7% interest rate over TWO of those debts who are charging me 21-24%.


#9

Could you sell your car? would that even help?


#10

1 yes 2 yes You could do both if you only owe a year or so on your car some banks will give you up to a five year loan for whatever the value is. I would definately try to stay with your current bank if possible. You also may be able to just refinance and Lower the payments on the current car loan and get a small signature loan for the other debts. It realy boils down to your credit worthiness and your relationship with the bank. If you ever get a extra 1,000 buy a 1,000 bond and keep rolling it over and the bank will love you


#11

I’m not going to sell the car. That is absolutely out of the question. I know the problems it has, I know how it acts, and I love the car. I simply refuse to sell the absolute most reliable car I’ve ever owned.


#12

So anyway, I went to talk to my insurance agent about my coverage.

Good news!

I was able to up my deductible to 500, which saved me money. I was able to rearrange things so that I would have the same coverage and save money. He also suggested Renters insurance which would be like 8.33 a month, add it on with a multi line discount and still pay 60 less a month for insurance than I am paying right now.

He showed me two other things I could do to help save me money and pay off high interest cards in the long run.

  1. Transfer my Capital one card to a State Farm credit card with an interest of 9.99 instead of 23.17%. This has a 0% balance transfer rate, so I wouldn’t pay money to have it transfered.

  2. Transfer my car loan payment to a State Farm bank with the loan amount of 11.9k. This helps me do two things:
    2a. Drops my interest rate on the car loan by a whole percentage
    2b. The extra grand would let me pay off my computer finally.

~I would be reducing the payments on my insurance while picking up Renters insurance for myself on my apartment. – 60/month
~I would be reducing the interest on my credit card payment. – 30-50/month.
~I would be reducing the payment on my car loan AND paying off my computer in full thereby decreasing my monthly bills by an entire bill payment. – 70+35=105/month

I’d be saving myself roughly 195-215/month in expenses.

Do any of you know just how BADLY I need this right now? lol It took me being forced out of a job to get this done, and I wish I had done this sooner.

The problems though is if I can’t get approved for this CC transfer, or this loan won’t go through because I’m asking about 2.1k more than the car is actually worth. I’m keeping optimistic about this, because I desperately need this.


#13

Very good. I’m transferring my auto from Geico to Farmers.