Bank Loans...

[the_new_santa1]

Hi,
I am curious about getting an auto loan for a fairly small amount about 9,000. I went to my bank and they said I would have to get colission coverage for the car. I do not want to pay for colission, just liability, I personaly think that colission is a waste of money..but that is just me, anyways can I just get a loan and say I am buying stuff for a fence or a deck or building a garage or something like that, so I dont have to get colission coverage. I also will be getting this loan now, and in about 2 months I will be coming into some money about 5 g's will I be able to pay out some of the loan early?

Thanks for the help,
Kelsey

[the_new_santa1]

I need on this tonight as I have a meeting in the morning please help....

[ShOwOfF]

Who is your bank? I don't know of any major institution that requires collision insurance on a secured vehicle loan to qualify. Even if they did, the car is only worth $9000 so i'm assuming that it is relatively old.

To answer your question though, i believe your lender will likely want to secure your vehicle to provide you the loan. Asking for a loan to build a fence would provide them nothing to secure against the funds they provided to you, thus will be harder to qualify for.

I would ask for an unsecured line of credit, or just a flat unsecured loan. Let them know that you don't want collision and weigh your options that way. If they still say they need to have collison to qualify you for a secured car loan, walk away and go to another lender.

[the_new_santa1]

ok, Thanks alot for your help.....

[the_new_santa1]

My question still stands though would I be able to pay out a good portion of the loan early....?

[CRX-R]

Yes you will with most major banks. Lump sum payments are allowable

[lint]

As long as the loan is open, you can make additional payments without penalty. But making additional lumpsum payments won't reduce your monthly repayment amount, it will just shorten the over all length of your loan.

[rc2002]

Listen to showoff and get a line of credit. Lower intest rate, less restrictions, plus you can pay back any amount anytime you want. I used that to buy my first car.

[Xtrema]

Yes, every bank require collison coverage for car loans to protect their investment.

Unsecure line of credit is the way to go and usually loan officer would have brought that up if you qualify.

[RX-7_TWINTURBO]

My secured car loan did not require collision coverage

[the_new_santa1]

So intrests rates on an unsecure line of credit are better than that of a auto loan....Got it...!Any thing else I should know? and for anybody that has a line of credit right now what intrest rate are you at...?

Thanks

[lint]

your rate will depend on your credit rating and the amount you borrow. You should talk to your bank about what you would qualify for and which option would be best for your particular situation.

If you're still a student, a student LOC is the way to go. Best interest rate.

[scat19]

Originally posted by CRX-R
Yes you will with most major banks. Lump sum payments are allowable

It is now law that you cannot be penalised for paying early.

[nonsane]

I applied for a loan of 2000$ about 2 years ago. the banks told me they would give it to me with about 19%-21% interest.

What i ended up doing was getting a low interest credit card(10.5%) And this way i could pay it off whenever i want, i ended up paying it off in about 5/6 months instead of the 2 years that the bank wanted me to do.

(and then, no collission is neccessary)

What interest rates did the bank give you?

[benyl]

do careful calculations on those credit cards. They are compounded daily. Bank loans are compounded monthly.

10.5% might seem a lot lower, but in the long term it isn't.

[codetrap]

.

[benyl]

Why wouldn't you want to get collision?

i mean, would you want to be stuck paying for a car that doesn't move that you crashed and can't afford to repair?

I mean, we are all good drivers, but people do screw up

[lint]

Originally posted by codetrap
Ok.. a bank will always want to secure thier loan, and I've NEVER heard of one not requiring you get have collision on it.

Collision Insurance

Collision insurance coverage pays for damage caused to your vehicle in an automobile accident, when you are "at fault". A standard collision automobile insurance policy will pay for any repairs up to the fair market value of your car.

I'd be shocked if a bank let you NOT have collision insurance, as it secures thier money for them.

As for unsecured lines of credit vs car loan. A good friend of mine just got her car loan at 3.9%. Unsecured lines of credit are more in the range of 7.25%. You do the math.

Nice rate, I assume that is for a new car though and financed through the dealer. Car loans at the bank usualy can't touch the rates you can get at the dealerships.

[codetrap]

.

[the_new_santa1]

Originally posted by benyl
Why wouldn't you want to get collision?

i mean, would you want to be stuck paying for a car that doesn't move that you crashed and can't afford to repair?

I mean, we are all good drivers, but people do screw up

Insurance for me with colision, would be retarted....it is about 5000 a year, I am only 16 I work pretty much everyday, and I still only make about 1000 a month, which is not much once you subtract, payments for a car, insurance, food..., and women....These is nothing left, it seems, I was on a tournamnet paintball team and I have to leave because A new car means more to me than paintball....... ...