Refinance with upside down loan
Seasoned HDF Member
Joined: Aug 2013
Posts: 35,820
Likes: 38,671
From: Post Falls, ID
Yeah I understand that man, I can come up with the cash, Id just rather get this loan sooner than later and continue paying these payments for another 4 months before I can put the money down.
It it was a freak accident that happened and I had to help a family member with the $ I didnt have at the time, which caused the down spiral of my credit, I had a 823 when I was 21 and the last incident screwed it down to a 580. But hey, baby steps to getting it back up.
Just wondering if anybody knew of a good company that would help me out, I appreciate the advice.
Tourer
Joined: Sep 2012
Posts: 494
Likes: 63
From: Bay Area, CA
A loan officer would lose his job for making that loan.
If you've got yourself back to the 718, then you've got some free cash flow to work with.
And it's good that you're looking at this and cleaning up the mess. Borrowing money at 15% for a motorcycle was not a good decision, but you already figured that out.
I ran a few numbers. I didn't see where you'd posted any of your balances, so I made some assumptions. Current loan balance of $15k, current bike value of $12,500. Current interest rate 15%. ReFi rate at 3%, but only after you get down to 100% loan-to-value.
Option 1): Do nothing, just keep paying your current payment for the life of the loan. You will pay a total of $18,718.
Option 2): Re-finance the $12,500 at 3%, and take out a personal loan at 15% to cover the shortage in your equity. Grind that out, and you will pay a total of $16,206, so there is a substantial savings to be had.
Option 3): Find an extra $300/mo in your budget right now, and make extra payments on your current loan. In four months, your principle balance will be below the $12,500 value on the bike. Once you are there, then do the re-finance at 3%. Grind all that out, and you'll pay a total of $15,702.
If my assumption on the current balance is wrong, it doesn't really matter. The numbers will come out proportional to these, whatever the current balance is.
Bottom line: The best way forward from here is to accelerate payments for a few months now, get to where you have adequate equity to do a straight refi, and then get a new loan.
Good luck to you.
And it's good that you're looking at this and cleaning up the mess. Borrowing money at 15% for a motorcycle was not a good decision, but you already figured that out.
I ran a few numbers. I didn't see where you'd posted any of your balances, so I made some assumptions. Current loan balance of $15k, current bike value of $12,500. Current interest rate 15%. ReFi rate at 3%, but only after you get down to 100% loan-to-value.
Option 1): Do nothing, just keep paying your current payment for the life of the loan. You will pay a total of $18,718.
Option 2): Re-finance the $12,500 at 3%, and take out a personal loan at 15% to cover the shortage in your equity. Grind that out, and you will pay a total of $16,206, so there is a substantial savings to be had.
Option 3): Find an extra $300/mo in your budget right now, and make extra payments on your current loan. In four months, your principle balance will be below the $12,500 value on the bike. Once you are there, then do the re-finance at 3%. Grind all that out, and you'll pay a total of $15,702.
If my assumption on the current balance is wrong, it doesn't really matter. The numbers will come out proportional to these, whatever the current balance is.
Bottom line: The best way forward from here is to accelerate payments for a few months now, get to where you have adequate equity to do a straight refi, and then get a new loan.
Good luck to you.
Seasoned HDF Member
Joined: Jan 2011
Posts: 28,842
Likes: 16,583
From: Wisconsin, USA
Do you have any home equity? A home equity loan would work best. Do you use a credit union? If you have any veterans in your family, or other prerequisites, Penfed is excellent.
https://www.penfed.org/learn/ways-to-become-a-member
I know its irritating to be told this, but try to avoid debt. Especially at loan shark rates. If that hurts your feelings, don't post about being upside down on a car, and a bike. Lots of us have been where you are, and are just trying to help you dig out of your hole.
https://www.penfed.org/learn/ways-to-become-a-member
I know its irritating to be told this, but try to avoid debt. Especially at loan shark rates. If that hurts your feelings, don't post about being upside down on a car, and a bike. Lots of us have been where you are, and are just trying to help you dig out of your hole.
Stellar HDF Member
Joined: Mar 2011
Posts: 3,482
Likes: 632
From: NorCal Rocklin
I dont think you would be able to refi a motorcycle loan with negative equity. Credit unions will not take that risk of assuming your loan to it's given value. That is why they want a down payment. Too risky for them.
Keep making the payments until you get that 2500 down payment to refi. That is your only hope right now. Think of it this way, if you are still are able to get by making your current payments, save enough to refi when you have enough or get a new bike and roll that negative equity. Right now your only hope is time.
Keep making the payments until you get that 2500 down payment to refi. That is your only hope right now. Think of it this way, if you are still are able to get by making your current payments, save enough to refi when you have enough or get a new bike and roll that negative equity. Right now your only hope is time.
Advanced
Joined: May 2018
Posts: 66
Likes: 10
From: central texas
double those payments up every month. that will make a nice impact on the balance to get you
to refi territory.
to refi territory.
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Road Warrior
Joined: Jul 2012
Posts: 1,541
Likes: 412
From: Studio City, CA via Rochester, NY
If you've got yourself back to the 718, then you've got some free cash flow to work with.
And it's good that you're looking at this and cleaning up the mess. Borrowing money at 15% for a motorcycle was not a good decision, but you already figured that out.
I ran a few numbers. I didn't see where you'd posted any of your balances, so I made some assumptions. Current loan balance of $15k, current bike value of $12,500. Current interest rate 15%. ReFi rate at 3%, but only after you get down to 100% loan-to-value.
Option 1): Do nothing, just keep paying your current payment for the life of the loan. You will pay a total of $18,718.
Option 2): Re-finance the $12,500 at 3%, and take out a personal loan at 15% to cover the shortage in your equity. Grind that out, and you will pay a total of $16,206, so there is a substantial savings to be had.
Option 3): Find an extra $300/mo in your budget right now, and make extra payments on your current loan. In four months, your principle balance will be below the $12,500 value on the bike. Once you are there, then do the re-finance at 3%. Grind all that out, and you'll pay a total of $15,702.
If my assumption on the current balance is wrong, it doesn't really matter. The numbers will come out proportional to these, whatever the current balance is.
Bottom line: The best way forward from here is to accelerate payments for a few months now, get to where you have adequate equity to do a straight refi, and then get a new loan.
Good luck to you.
And it's good that you're looking at this and cleaning up the mess. Borrowing money at 15% for a motorcycle was not a good decision, but you already figured that out.
I ran a few numbers. I didn't see where you'd posted any of your balances, so I made some assumptions. Current loan balance of $15k, current bike value of $12,500. Current interest rate 15%. ReFi rate at 3%, but only after you get down to 100% loan-to-value.
Option 1): Do nothing, just keep paying your current payment for the life of the loan. You will pay a total of $18,718.
Option 2): Re-finance the $12,500 at 3%, and take out a personal loan at 15% to cover the shortage in your equity. Grind that out, and you will pay a total of $16,206, so there is a substantial savings to be had.
Option 3): Find an extra $300/mo in your budget right now, and make extra payments on your current loan. In four months, your principle balance will be below the $12,500 value on the bike. Once you are there, then do the re-finance at 3%. Grind all that out, and you'll pay a total of $15,702.
If my assumption on the current balance is wrong, it doesn't really matter. The numbers will come out proportional to these, whatever the current balance is.
Bottom line: The best way forward from here is to accelerate payments for a few months now, get to where you have adequate equity to do a straight refi, and then get a new loan.
Good luck to you.
Seasoned HDF Member
Joined: Jan 2015
Posts: 16,013
Likes: 7,139
From: Sandy Eggo's North County
Originally Posted by portroyal91@gmail.com
15%, I got quoted with 3% from the credit union that needed the down payment
That's rich. Good luck you shrewd negotiator!