Unsecured loan @ 9.5% for 24mo???

2 Replies

We currently have the deed to a property that we need to rehab. The conversation starts with finding the 25k for the Reno. This will be the first time, for us, using another type of funding that isn't our own cash. We talked to our local credit union and the most money they can offer on an unsecured loan is $13k. We don't know if using the property as collateral is wise since we want to use this property as a BRRRR. Would having the property's collateral effect us with the refi later? We also went to our local bank and they can offer the 25k for 24 months at 9.5%. Is this a reasonable offer, what is a good interest rate for this situation? Any suggestions?

Originally posted by @Sean Tippens :

We currently have the deed to a property that we need to rehab. The conversation starts with finding the 25k for the Reno. This will be the first time, for us, using another type of funding that isn't our own cash. We talked to our local credit union and the most money they can offer on an unsecured loan is $13k. We don't know if using the property as collateral is wise since we want to use this property as a BRRRR. Would having the property's collateral effect us with the refi later? We also went to our local bank and they can offer the 25k for 24 months at 9.5%. Is this a reasonable offer, what is a good interest rate for this situation? Any suggestions?

 Sean, what are the costs for the closing with the local bank? This rate is in the hard money space its not terrible for the loan amount. 

@Sean Tippens   Assuming a 401k loan isn't an option?  4 or 5 % interest that you pay back to yourself.  

9.5% for a personal loan isn't terrible, and a better option than putting the rehab on credit cards.  An installment loan usually doesn't impact your credit too much like the way use of your CC does.