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Refinancing auto loan. Shall I take equity out to pay off credit card?
Refinancing auto loan with low balance thru credit union in order to reduce payments each month as I just lost my job & need $$ to pay mortgage first. I can take the equity in the vehicle to pay off large credit card balance. This is trading unsecured debt for secured. Interest would be substantially less by doing this & balance on both would be pd in 4 yrs.
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rosythumbs
6 months ago
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NO... never take equity out of a depreciating asset...
You will never recover that equity, and owe that much more when you trade the car in..
Unless you plan on driving this car into the ground, and paying cash for the next one you buy, I would never even consider it.
matman1490 6 months ago
Thanks, Matman. That is what I thought but wanted some advice. What about taking out unsecured personal loan to pay off higher balance credit card if the interest savings is worth it?
rosythumbs 6 months ago
The unsecured personal loan for paying off a high-interest credit card could be a good idea. How much you'll save depends on the interest rates of both the card and the loan. But in general it's a much better idea than refinancing your vehicle.
Clairissa 5 months ago