Is paying off an $11k auto loan with a credit card a bad idea?
follow-up from the OP Thanks for all the responses so far. I would like to add a few things to help clarify, and redirect some incorrect assumptions. I understand the concerns about the future, and its totally reasonable to expect that anything can happen (including this horrible financial situation outlasting us all), but I can assure you at this point, the two of us are in a healthy, committed long-term relationship. My bf is taking full responsibility and actively working towards correcting his past bad decision in entering into the horrendous loan. He did not ask me to put this on my CC, or any such thing. He doesn’t want to burden me, nor do we have any desire to create co-dependencies of any sort. The CC thing is an option only I thought of, and am running by the MeFi hive, because both of us are unable to get approved for a loan together (despite our high credit scores and excellent payment/lending histories…banks just simply aren’t lending). We are three people openly and ami
I’m sorry if it seems we are all piling on you but I think a few of us have been burned by the old “put your name on the paper and I’ll pay it off, baby” line. Okay, I still think you assuming his debt is a terrible idea although I am glad to hear there is no pressure from him. The only thing I could think of that may help assumes you are living together. If so, both of you get another part-time job (since you are a student I bet you could be a tutor). See if his student loans could be deferred due to financial hardship or if he enrols in one online part-time course. Sell everything you have of value (if you have two computers, sell one etc). For the next year both of you live off what YOU make – you pay everything, rent, food, utilities. Every penny he earns goes to paying off the loan. Even if he is only making $20,000 a year it will not take that long to clear it off. As soon as it is paid he should be able to return the favour and have you live rent-free for an equal amount of time
Credit card rate (20%+?) and credit limit are very likely limiting factors for the boyfriend in taking on the loan himself. Most people do not have $11k of credit line available to them, waiting to charge up. Selling the car does NOT get him out from under the loan, as its still a loan he would owe $$ on. And he’s not legally able to sell a car he doesn’t own anyway. And yes, it would seem that the boyfriend is completely upside-down on the loan. A shitty person would likely walk away easily. It’s been stated that he’s faithfully paid this loan since 2003, so I don’t think he’s just going to bail and make it the ex’es problem. Totally the car would be an absolutely nightmare I’m sure. Even a routine traffic stop could be a huge problem.
I think it’s a terrible idea, but perhaps other people with disagree. I know that my husband’s credit card rate has gone through the roof, even though he has excellent credit and carries no balance. Also, he has no student loan debt. So I would be concerned about random rate changes. It’s your boyfriend’s car, so why can’t he use his credit card or spread it out over several cards? I imagine you want to drive the car, which is why you’re getting involved, but if you really need a car, I would suggest you buying your own used vehicle and staying out of this mess.
