Borrowing money for a used car- which loan?
Question: Our family has expanded from 2 to 5 in the last couple of years and I need to buy a minivan. I could nearly afford to pay out $10k in cash for a used vehicle, but since we’re a single income family, I dont want to deplete our cash reserves. We own our own home, it’s worth ~$1.4M and we owe $250k on the mortgage.
My first inclination was to get a car loan for $10K, but it seems the interest rates are quite high. The other options are a home equity loan or line of credit, but my concern is the fees will outweigh the interest savings on such a small loan.
Advice would be welcomed.
Answer: Don’t get a car loan. Look around, you should be able to find a bank or credit union that offers home equity loans or lines of credit with minimal or no fees. It would help if you specified the major city you are near.
I don’t want to be as presumptuous as one of the other posters, but if you have $1.15M in home equity and are concerned about depleting your cash reserves by $10k it sounds like your finances are out of wack.
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Filed under: Home Equity Loan
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