Can I get a personal loan to pay off my car’s negative equity?

Loans
1

I’m thinking about asking my credit union for a $14,000 personal loan to cover the negative equity on my car so I can sell it. My credit score is over 700, and I earn about $60k a year. If I get approved, I can pay it off in less than a year. Would that help my chances of getting approved?

2
  1. Why do you want to sell the car?
  2. Personal loans usually have higher interest rates than auto loans. This doesn’t sound like a great idea.
3

Niko said:

  1. Why do you want to sell the car?
  1. Personal loans usually have higher interest rates than auto loans. This doesn’t sound like a great idea.

I’m selling it back to the dealership. Buying this car was a huge mistake, and I want to start fresh. I didn’t pay attention to the papers I signed, and now I’m stuck with a 14% interest rate. I doubt the credit union would give me a worse rate than that.

4

@Dru
So you’ll sell the car back with no equity and still have a personal loan to pay off. And no car. This doesn’t sound like a smart move.

5

Niko said:
@Dru
So you’ll sell the car back with no equity and still have a personal loan to pay off. And no car. This doesn’t sound like a smart move.

Yes, I’ll have no car. I made a bad decision and just want to fix it. Do you think I’d get approved for the loan?

6

@Dru
But then you’ll have no car.

7

Dustin said:
@Dru
But then you’ll have no car.

I’ll be fine without one.

8

Dru said:

Dustin said:
@Dru
But then you’ll have no car.

I’ll be fine without one.

How will you get to work? And what happens if you lose your job? Can you still pay the loan?

9

@Dustin
I take the bus to work, and it’s free where I live. If I lost my job, I wouldn’t be able to pay the loan.

10

@Dru
You might get more for the car with a private sale instead of selling it back to the dealership. Have you thought about refinancing instead of selling?

11

Sage said:
@Dru
You might get more for the car with a private sale instead of selling it back to the dealership. Have you thought about refinancing instead of selling?

I just want to get rid of the car entirely. The dealership offered me the highest price.

12

@Dru
I don’t plan on getting another car since I don’t really need one.

13

An unsecured personal loan will probably have a similar or worse rate than your current auto loan. But you’d save on car insurance if you sell the car.

14

Renny said:
An unsecured personal loan will probably have a similar or worse rate than your current auto loan. But you’d save on car insurance if you sell the car.

Yeah, it’ll probably be around 20%.

15

You’ll likely get approved, but the interest rate will be over 10%.

16

Why not refinance the auto loan for a better rate? Losing $14k seems like a bad choice.