I need a short term interest only loan. Advice?
-
- Posts: 67
- Joined: Mon Feb 20, 2012 7:48 am
I need a short term interest only loan. Advice?
I prefer not to sell funds in my taxable account and need to borrow $500,000, interest only, for a short term period (3-6 months or so). I need the money within 30 days. My local bank cannot do such a loan and Schwab connected me to Quicken which offers a loan product at 3.25% if I also refi my primary residence. I read a little about Penfed on this Board. Any advice on who to contact with good customer service, ease of process and best terms? Thanks.
-
- Posts: 553
- Joined: Tue Feb 15, 2011 7:35 pm
Re: I need a short term interest only loan. Advice?
One possibility, outside a home equity loan or mortgage, is if you roll over an IRA or 401(k) from one provider to another.
You could ask the current custodian to send you a check for the balance. You then have 60 days to deposit the funds with your new custodian.
This is highly risky, of course, and not recommended, because if you don't roll the funds over in time, it would count as a withdrawal, with tax and penalties due.
Now that I provided some creative/dangerous advice, I have to ask, what, in general terms, will the money be used for, and how sure are you that you'll have in hand at the end of this period?
You could ask the current custodian to send you a check for the balance. You then have 60 days to deposit the funds with your new custodian.
This is highly risky, of course, and not recommended, because if you don't roll the funds over in time, it would count as a withdrawal, with tax and penalties due.
Now that I provided some creative/dangerous advice, I have to ask, what, in general terms, will the money be used for, and how sure are you that you'll have in hand at the end of this period?
-
- Posts: 67
- Joined: Mon Feb 20, 2012 7:48 am
Re: I need a short term interest only loan. Advice?
Thank you. I do not love your idea, but I appreciate your thoughts. I am sure I will have the money to pay off the loan within 6 months or so.
-
- Posts: 553
- Joined: Tue Feb 15, 2011 7:35 pm
Re: I need a short term interest only loan. Advice?
Certainly. I don't like the idea either. For an amount this large, a loan secures by real property (your home) seems like the only option.
A 401(k) loan could be another option, but I would guess they have caps that are much lower than the amount you need.
A 401(k) loan could be another option, but I would guess they have caps that are much lower than the amount you need.
-
- Posts: 1329
- Joined: Wed Sep 26, 2012 5:30 pm
Re: I need a short term interest only loan. Advice?
Another vote for HELOC if the situation allows.
-
- Posts: 1908
- Joined: Mon Feb 25, 2013 12:34 am
- Location: Southern AZ
Re: I need a short term interest only loan. Advice?
How about a margin loan against your securities?
Re: I need a short term interest only loan. Advice?
+1jlawrence01 wrote:How about a margin loan against your securities?
Maybe in combination with a 401k loan.
You would be on a tight timeline to refinance your home in 30 days and even a home equity loan might be tight to setup in that amount of time since the home refinance process often gets a lower priority than loan applications for home purchases.
The process for approving a mortgage has gotten a lot more complex and stringent after there were all the bad loans in the housing crash so it can take longer than before.
I refinanced my house through PenFed a few years ago and I did not have any problems but others have complained that their home refinances were a bit slow. I think that is one of the reasons that some PenFed loans application come with a free 90 day lock.
One problem with getting a large short term loan is that there is still a lot of work and risk for the lender but not much upside even if the interest rate is high so it will likely be difficult to get a short term loan. You might have better luck if you ask for a longer term loan that does not have a pre-payment penalty.
-
- Posts: 67
- Joined: Mon Feb 20, 2012 7:48 am
Re: I need a short term interest only loan. Advice?
thank you. I applied on line today for a loan through Penfed.
-
- Posts: 542
- Joined: Wed Jan 02, 2008 6:06 pm
- Location: Berkeley, Denver, Colorado USA