Should I get a reverse auto loan to pay off credit card debt after a messy divorce?

"I had a messy divorce that's left me with $12,500 of credit card debt. I found out that my credit union will do a reverse car loan, meaning that they take my car as collateral and pay off my credit cards at a rate of 2.99%. Is this a good idea?"

Answer
“If you had to choose between $12,500 at a credit card interest rate or low-interest debt, which one would you choose?
The answer here’s a no-brainer: go for the reverse car loan. You might have a lien against your car after this, but at least your credit cards will be paid off.
The only other thing to consider is that your monthly payments will probably be higher, as you can’t pay the minimum like you would with a credit card. But in the long run, you’ll be glad you made the move.”
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Eric Schad
Answered on Jul 23, 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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