$5000 loan from bank....information and advice please?

Question

If I borrow $5000 from a bank what will the interest rate be? Its for a truck but the way I understand if I use a vehicle as collateral I will be obligated to get full coverage insurance on it. Can I avoid using the truck as collateral or even better use the truck as collateral but not alter my insurance. Also is there a set period of time that I will have to pay off the loan. I should be able to pay it off in a matter of months but I'm just curious. I already have a bank account if that makes any difference. (I am a very inexperienced individual when it comes to finances and such, if you haven't pick up on it yet, so please keep it informative but relatively basic.)

Answer 1

Depending on your credit, the interest rate will be anywhere from 5 - 12%. You can get a personal loan at around 6 - 7% in my area with good credit, but it has to be paid back in a year.

You are going to have to get collision insurance if the truck is collateral. If the balance in your account is $5000 you can use it as collateral, although this really only makes sense if you are trying to establish credit or if your savings account has a higher interest rate than your loan.

Auto loans are typically financed from 2 - 5 years. Used cars are financed at higher interest rates. Rates are typicaly 9 - 14% for auto loans.

Just so you know, you can call banks to ask them what their rates are on auto loans. You can shop around for the best rate. Also you don't have to feel weird about telling the bank rep that you don't know much about loans. I didn't know one thing when I financed my first auto loan a few months ago but the rep explained it all very well.

Answer 2

For vehicle loans a lot will depend upon the age of the truck. The rate, of course, will also depend upon your credit history. Bank rates are usually pretty high for a loan such as this. If the truck is older, 5 years +, you can expect interest rates to be very high (18%+++++), which is not much better, if not worse, than a credit card rate, even with the truck as collateral. (Don't blame me, I don't understand why either.) (And, Yes, people, I know credit cards are dirty words to most, but all that matters are numbers if the rate is lower and pay it off quickly.) Also, with an older car, banks want their money back quickly, < 2 years, before the car is worthless. If you are buying it from a dealership, then you may be able to use e-loan. I got a loan on there with a great interest rate.

Car loans are funny beasts. Often you have to have better cashflow to buy an older car than a new car. Your note could be lower on a new car with a 6 year loan than an older car with a 2 year loan. Remember that when you see penniless schmucks riding around in their brand-new, heavily-financed Expeditions.

If you can pay it off in a matter of months, then you may just want to wait, pay cash, and avoid the hastle.

Answer 3

The rate will depend on your credit score, value of the truck, and the length of the loan. You can avoid using the truck if you have that same amount of money at the bank to use as collateral-sort of defeats purpose of the loan but people do it anyways. Some places will charge you if you pay it off early, but you'll have the length of the term ( 24, 36, 48 etc months whatever you agree with at the bank) to pay it off- you'll have to pay it off by the end of the agreed upon term. Hope that helps.

Answer 4

about 8.5% with descent credit is the going rate at the Bank on most used auto loans-- yes as long as there is a lien then you must have full coverage on the auto. No you do not have to use the truck as collateral as long as you pledge something of equal or greater value such as a CD

Answer 5

I searched across the net and discovered a lot of spam. However this webpage worked for us: loaninstantsolutions.us-

RE $5000 loan from bank....information and advice please?

If I borrow $5000 from a bank what will the interest rate be? Its for a truck but the way I understand if I use a vehicle as collateral I will be obligated to get full coverage insurance on it. Can I avoid using the truck as collateral or even better use the truck as collateral but not alter my insurance. Also is there a set period of time that I will have to pay off the loan. I should be able to pay it off in a matter of months but I'm just curious. I already have a bank account if that makes any difference. (I am a very inexperienced individual when it comes to finances and such, if you haven't pick up on it yet, so please keep it informative but relatively basic.)