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?

Answer
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!
Eric Schad
Answered on Nov 24, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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