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Can I use positive equity in my car to take out a loan for a motorcycle?
I have about $10,000 of positive equity in my car that's only a few years old and has about 50,000 miles on it. I also want to get a motorcycle, but I need a loan to do so. Can I use the positive equity in my car to buy the motorcycle?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If you have positive equity in your car, you can certainly use that equity as collateral for another loan, especially because your car has only 50,000 miles.
With $10,000 in equity on your
car loan
, lenders will let you use a portion or the entire amount of that equity to purchase whatever you want. In your case, it’s a smart move, as car loans generally have much lower interest rates than motorcycle loans.Keep in mind that using this equity will require you to do a cash-out refinance. Because you’re refinancing, shop around to find the best rate possible.
Don’t forget to start motorcycle insurance once you get your new ride. With the
Jerry
app, you can compare quotes from over 50 top insurance companies and look for bundling options to help you save the most money. The average Jerry driver saves $879 a year on car insurance!View full answer
- Gregory R.
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