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Should or can I get a loan from my bank?

Can I get a lower interest loan from another bank to pay off a high interest loan I got for a ATV?

  • Ok, I purchased a ATV for $6300 with financing through Retail Services. It is $99 a month minimum with a 17.9% interest rate. I can only pay close to minimum on it, so the interest eats me alive. In the past 2 years I have only paid off $1500 of the ATV. Could I go get a loan from a local bank ( thinking credit union) at a lower interest rate for the amount remaining on my ATV to pay it off? I am mainly looking to pay down my original loan faster than I can currently only paying minimum. My credit is almost perfect, I pay everything on time.

  • Answer:

    Most likely not. The best rate you can usually get for such a purchase is when it is new. Your ATV is now probably worth less than you owe so amy loan you would be able to get will not be fully secured and will have a higher rate. You should have bought a used one much cheaper. Your best bet now is to try to double up your payments and pay it off sooner or sell this ATV which you really couldn't afford in the first place.

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Yes - you should absolutely be able to get a better loan. 17.9% is a ridiculous interest rate to pay for any type of loan! A few options: Check some of the local banks and national banks for a different loan. While you won't be able to get a secured loan against the ATV at this point in time, if you do have good great you can most likely qualify for an unsecured personal loan. A quick look at Citibank's web site (http://www.citibank.com) shows that their current personal loan interest rate is 10.49%, much less than your 17.9% monstrosity. Consider a low interest credit card that will allow you to transfer a balance when you open a new account. Many people might advise you against using a credit card to pay off a loan, but there are some advantages to doing so. Look for a credit card that will offer you 0% for the first six months and then has a low rate. If you dig deep enough you should be able to find one with a fixed rate around 12.99%, although you might not be able to find this low a rate along with the 0% introductory rate. Be careful if you go this option though, and make sure that you continue to pay everything on time or your rate will jump! You'll also end up paying a small fee to transfer the balance to the credit card - most likely around 3% or $144 of your $4800 balance. If you have a trusted friend, neighbor, or relative consider entering into a private loan with them.

Turk II

Credit unions typically offer loans to members. Inquiring about a loan at an institutions would probably require a credit check. Too many "hard inquiries" in the last 2 years will lower the chances of being approved for another loan. A refinancing loan may require other fees, so make sure it's still in your best interest before signing. Another option is to pay more than the minimum payment on the current loan. Check the terms to make sure there are not prepayment penalties. If not, see if you can pay more each month. Even if it's just a few dollars, it will add up.

Alex

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