My wife and I bought a used Suburban private party back in March for $29k. I took out a used car loan for the full amount at 6.12% interest for 60 months and there's no penalty for paying off early. This allowed me the flexibility to take our time selling our other car without worrying about the cash flow. I sold our other car for $11.5K in May and applied it to our car loan. The current loan balance is now $16,164.
The problem is I just learned my credit union will not update my monthly payment to reflect the new balance. The current payment is $561.98 and I expected the payments to drop to ~$302. I called and emailed their loan department but it doesn't look they they are going to budge. The loan contract explicitly states the monthly payments will be $561.98 regardless and they are not willing to modify the contract.
My question is: should I use my HELOC (same credit union) to payoff the car loan to get my monthly payments down to where we're comfortable with? I opened the HELOC last year without any intention of using it (just as another source of funds as a last resort type of thing). It's a variable rate currently at 8.5% with a $50k available credit and $0 balance. I know it's usually not a good idea to tie a HELOC to anything other than your home value, and I'm concerned about the variable rate, but I didn't anticipate my credit union to be unwilling to work with me. Thoughts?
Submitted June 30, 2023 at 07:17PM by krabalo https://ift.tt/c6GfgKF
