Financing Strategy

Discussion in 'General OFF TOPIC' started by jimharvey1, Sep 14, 2013.

  1. jimharvey1

    jimharvey1 Junior Member

    I just wanted to put this out incase anyone might have some money laying around in CDs and would like to benefit a little bit from it.

    CD Secured Loans. If you have money laying around just collecting interest (not much nowadays) and would like to put it to use, I'll fill you in a little on what I did. Use the CD as collateral on your motorcycle loan INSTEAD of the title to the motorcycle. This way, YOU keep the title of the motorcycle with no lienholder listed. This makes it WAY easier to either sell your bike or trade it in. The best part that I discovered, is my credit union offers CD secured loans at a rate of 2% above the going rate for the CD. For example, if the bank or credit union pays .75% interest on your CD and you use it as collateral for your motorcycle loan, you get your loan for 2.75%. Of course if the interest on the CD goes up, so does your loan interest and conversely, if it drops (which has been the case over the last number of years) so does the interest on your loan. Another benefit of using a CD-secured loan, aside from the previously mentioned retention of your lien-free title, is there is NO SET MONTHLY PAYMENT!!! If you happen to miss a payment (Christmas is coming and you could use that $300-$400 that normally goes toward a payment on the motorcycle that is tucked neatly into your shed in the back, tied to the battery tender with the snow piled halfway up the shed door), no big deal! The bank will not come beating on your door threatening to repossess. It just keeps accumulating interest on the remaining balance. Want to pay it off early, make extra payments or make a partial payment occasionally? No problem. No penalty. I've done this on two motorcycles already and it is EXCELLENT! Especially when the interest yield on the CD dropped below 1%. The going rate for a new bike loan through Harley Motor Credit was 4.99% I got mine through the CD-Secured loan at 2.65% using my 24-month CD.

    Just thought I would throw that out there as an alternative mindset for financing your ride and saving yourself a few dollars in the long run. The BEST part by far is having the lien-free title where you u can sell the vehicle and then pay off the loan AFTER THE SALE with the proceeds of the sale (or not-and just keep paying on it...your call), as well as the fact of NOT HAVING A FIXED MONTHLY PAYMENT that could adversely affect your credit rating if you miss it or, because of a temporary financial emergency, don't make it at all that month.

    It works for me.:D
  2. Slo-Ryd

    Slo-Ryd Junior Member Contributor

    Excellent info Jim. In a day where being pennywise and not dollar foolish is important, I'm sure this may help another member out. Thanks for posting :s