I called USAA and was quoted 6.5% interest, which seemed high to me as I have really good credit. Who did ya’ll use to finance your cargo trailer? I could pay cash but I like having an emergency fund.
i used the personal credit line from Wells. They are doing away with the PCL’s but it was 2.35% for 3 years
Mom & Dad…
Just being honest, they take good care of me even at 36 years old…
Mine never supported me, but when their names changes to Grandma and Grandpa, they started supporting my son’s racing.
To OP, if you have credit unions in your area, try them. They are usually a little lower in my area.
Dunno if makes sense but you could collateralize some securities if you have a taxable (non-IRA) portfolio. Lines if credit are floating and short term rates are really low. If it’s a short term type finance, where you will pay it off reasonably quickly, that might be worth looking at. You’d be looking in sub-3s I think. Problem is if you keep longer term and rates rise a bunch, ouch. Also, they probably will have minimum line size and no idea how much your trailer is gonna cost.
Couple options here. You could try Lightstream as they do good “toy” loans with reasonable rates and repayment terms. Alternatively, if you have a 401k, you can often take a loan against that depending on how your employer has their 401k set up.
Plus if you borrow against your 401k you pay yourself interest not a bank.
I have that option at 1.24%
When I raced cars I bought a living quarter trailer. I shopped about 6 places. Suntrust at the time was hands down the best. That was about 10 years ago. I do not know if it was because of the living quarter, or just what they do, or if they still do
I would make that last choice. Paying the bank 6% is better than losing the 12%+ you are probably getting from 401k right now. Affectively it would be like paying over 10% on the money you borrowed
Hey ho agreed. The max you can borrow from most 401K plans is 50K. Interestingly, the best option always seems to be borrowing from yourself in some way.
We need a new section: Kart Finance: Apex every Penny
Depends on what the market is doing and how fast you plan to pay it back. The OP indicated they had cash but preferred some level of financing to spread out payments. Depending on where the market is at, it can make sense in some situations. Another option if you have a fair bit of stock is to go to someone like Merrel-Lynch and open a line of credit against your stock. Often, the rate on these can be in the 1.3% to 2.5% range. Downside is you usually need a fair bit of stock as collateral.
Kart racers is the last place I would take financial advice
We all spend more than we should on a hobby that is too expensive
I might just go with the IRA option. Yeah I might loose a little in compounding interest, but I have a pretty heathy IRA (for my age) and I’ve seen a 52% return over just the last year alone.
I haven’t had a car payment in over 10 years, so other then my mortgage, I have zero debt. I’ve been able to take those monies and invest them. My house is only a year old and I’m already only 12 years away from paying it off. It amazing how far an otherwise $750 per month truck payment and a $200 credit card payment (when you don’t have that debt) can go when you can throw that money at the right investment vessels over time. (IRA & Additional house payments) So a small IRA loan at 1.24% paid off quickly seems like the best way for me to go.
I make okay money now, but I grew up very poor. So old habits are very hard for me to break. Karting goes 100% again my financial principals, but its just so much fun I allow myself that one vice. That old joke, “I bet your mom went to the Goodwill and complained about the prices.” That was my mom!
I do daily drive a beater thou. I’m convinced when I pull into my neighborhood, people probably lock their doors and clutch their purses. My only saving grace is I drive a truck and not a white panel van.
Don’t know what options there are in the rest of the world but I just put in on a credit card which sounds bad considering its 14% interest or something,
Over here banks would offer 1 year interest free if credit card debt was switched to them so I just shuffled between banks and went interest free for 3 years till I paid it off
Hey, don’t knock what you don’t know. For example, one of the few things we don’t talk about often on this forum is our professions. You really don’t know how we all finance our passion for karting unless you ask or someone randomly gives you advise.
Personally I am in the car business. 3rd Gen mechanic and have run several repair shops. I also have a degree in business management, which required several accounting classes. I am no dull blade when it comes to running numbers. If borrowing from your 401K reduces your total investments working, then that’s deal killer. You will lose more revenue than you gain in interest from yourself. Secondly, best forms of borrowing from your own assets is equity loans. Sort of like Dom was getting at, you could do a Home Equity Loan for sub 3% APR and depending on your equity easily finance a big purchase like a race trailer, kart, engine or whatever. I once finance a car on a HEL when rates started climbing back in the mid 2000’s. Paid off the loan in a fraction of time and interest it would have cost me through conventional routes.
Just saying, you don’t know us like you think you do. We are Wiley Bastardos with a thirst for racing.
I 100% respect your input. But the best advice (rules) I’ve ever received from extremely wealthy individuals that I admired: (blue collar individuals turned old money types)
#1- NEVER!! treat your house like a piggy back. (Home Equity Loans)
#2- Drive old cars/ trucks and avoid debt (when you can)
With that said, I’m not all knowing. I’m not 100% against borrowing money. Hense why I poised the question. Appreciate your feedback though.
Personally I agree with you on the borrowing thing. Did it when I was young and now just pay as I go. Experience has taught me that if you can’t afford to pay for it at the time of purchase, what good is paying someone else to do so. Of course large purchases like houses and cars (with low interest rates) are a bit of an exception, but when it comes to toys and hobbies I cannot see borrowing money for interest as a way to success.
On a side note, I was one of those hung out to dry in the late 2000’s with the housing crash. Growing up, I was always taught that investing in your home was an investment in your personal wealth. When the bust happened following a divorce and I was forced to give up half the equity, it made me laugh. It was the first I had ever heard of negative equity in a home. The Ex ended up signing over the house to me, because she would have owed me money if we had sold it at market value.
That is why not to borrow from it. If you are able to borrow from it at 1.5% rate then you are losing 50.5% on that money you borrow at the recent rate you have received. It would be much better to get the 6% loan from the bank
Racing is full of scalawags who have laundered their cash through burning rubber, I bet. I shall google this and report back.
Speaking of which, usury is still a thing, and here’s one of us that you really don’t want to be poor and borrowing from. Ran a payday loan company that was very predatory, apparently. Serving 16 years.