Looking to get maybe a 4-5k personal loan so I can avoid having a lien on a vehicle and get cheaper insurance. Just shopping around at the moment, but curious about everyone's good and bad experiences with different companies.

 

Why would having no lien make your insurance cheaper. Insurance company's base their rates on the owner/driver, not the amount of the outstanding loan. I only pay 3.79% on my new 2012 xB loan ($20k). My insurance is only $88/mo. for $100k/$300k/$25k coverage... and I live in Cali, which is notorious for higher insurance rates; and I'm insured by State Farm, which is also known for slightly higher rates than other "discount" insurance companies such as Geico or Mercury. (Mercury has terrible customer service from what I've been told.)

 

Pretty certain that full coverage is required by whoever your lien is with. As opposed to only the required "liability" coverage. Maybe it's an NC thing? Or maybe I just have no idea what I'm talking about! lol

 

Oh, I gotcha. I didn't realize your goal was to drop the comp. & collision coverage. If you can get an unsecured loan to payoff the car loan (lien), then yea I would expect you to be able to drop your insurance coverage and pay a lower rate. I would expect an unsecured loan rate to be higher than your lien rate, but I would think that the lower cost insurance would more than offset the increased interest of the slightly higher rate unsecured loan. If you go to bankrate.com or lendingtree.com you can probably shop companies to find the best rates in your area. Keep in mind that these companies will be running credit checks, so the longer you shop and the more companies that check your credit, the more your credit rating may drop.

 

credit union

 

Go to your bank - get a heloc or "home equity line of credit" . Best way to do it. Mine is a 7.99 rate. I have bought MANY vehicles this way - get a quick cash advance (say $5k). Then use a credit card, to get a 0% rate for 2 years (fixed). Flip the balance over to the 0% card to avoid any interest (usually, you have to pay like a 3% fee upfront, and its totally worth it).

use the heloc to get the cash you want (I dont recommend using the credit card checks to do this part, because you may not be sure of the exact amount yet).

Let me give you an example of me buying my CIVIC SI ep3 hatch.
2003 car, costs $7200. I kept watching on ebay until I found the perfect one. Well, once you find the car, you *may not of* gotten your balance transfer check or whatever from the credit card companies, so go use that HELOC credit to get say $7k.
Once you have the car in hand, contact the credit card company for the balance transfer check. Get the best deal, longest time, 0% you can. And just flip the balance over. If you can pay it off in those two years, you pay next to nothing in interest.

I have even used this trick to fund certain investments... BUT, your taking a risk, especially if you have the chance to get less than 4-5%. However, this year I funded about $12k that was producing a 11.4% yield. I made about $780 in about two months profit after paying fees, closed the loan, and went to do it again but then the fund dropped making it sketchy again. So I just left it alone.

 

I've bought two cars using a similar method as TorqueTC, but just used the CC checks to pay for them. My xB was a 3.9% for life with no cash advance fee (AmEx), and my wife's Expedition is 6% for life with a 5% fee, but maxxed at $150 (USAA).
At the time, both interest rates were lower than any car loan, and a lot less hassle.
The OP's situation is a little different, as he already has the car, but the result is the same, the title is in your name and insurance options open up.
Something to keep in mind though; Can you afford to replace the car in case of loss if you drop C&C?