Loan for garage

[ffjosh]

Im getting excavating work done, and a 24x30 shop built with concrete for $14k. Cheapest price for the quality. Ya I could get a $7k Barn but there quality *****.

I do not believe in loans and do not want one.

However im trying to start a family and building this shop is going to make me poor.

Im looking for a $10-$15k personal loan. Something with a 5 year loan with no penatles if I pay it off early.

Ideas? "Money is cheap" these days

Note: I am not refinancing.

 

[bdamico]

if you don't want to go the traditional route but want an unsecured loan, there is prosper.com and lendingclub.com. not recommending them for your situation but they offer what you asked for. I am an investor with those so I know they are legit, but can't speak to the experience on taking out loans there

 

[NUTTSGT]

I doubt any bank is going to give you a $10-15,000 personal loan. Too much of a loan with no collateral.

Can you get the shell up on your own finances ? Then finish it off as you can afford it ?

 

[rumpity_z28]

A credit line works pretty good, then when you lumps of money you can throw it down directly on the principle. When you can't pay, you just pay the interest.

 

[ffjosh]

if you don't want to go the traditional route but want an unsecured loan, there is prosper.com and lendingclub.com. not recommending them for your situation but they offer what you asked for.

What do you mean by traditional route?

 

[Gary S]

I wouldn't consider anything but your local bank or credit union. Go where you do your banking. They know you best and are most willing to work with you.

 

[ffjosh]

I doubt any bank is going to give you a $10-15,000 personal loan. Too much of a loan with no collateral.

Can you get the shell up on your own finances ? Then finish it off as you can afford it ?

I have the money saved to pay it off. However if something where to come up (medical, car dies ect) Im screwed.

 

[ffjosh]

I wouldn't consider anything but your local bank or credit union. Go where you do your banking. They know you best and are most willing to work with you.

I use chase and they stopped giving out personal loans a couple years ago

 

[bdamico]

I use chase and they stopped giving out personal loans a couple years ago

which is a big reason why people are using peer to peer lending these days.

 

[bdamico]

What do you mean by traditional route?

trying to get a secured loan on the property.

 

[pfctblu]

Im getting excavating work done, and a 24x30 shop built with concrete for $14k. Cheapest price for the quality. Ya I could get a $7k Barn but there quality *****.

I do not believe in loans and do not want one.

However im trying to start a family and building this shop is going to make me poor.

Im looking for a $10-$15k personal loan. Something with a 5 year loan with no penatles if I pay it off early.

Ideas? "Money is cheap" these days

Note: I am not refinancing.

What do the statements here taken from above mean? "I do not believe in loans and do not want one. ...Im looking for a $10-$15k personal loan."

 

[ffjosh]

What do the statements here taken from above mean? "I do not believe in loans and do not want one. ...Im looking for a $10-$15k personal loan."

What I am saying is I hate loans and do not want to take one.

However I need to take one because I dont want to have zero $$$ in my bank account

 

[hunter9]

I have recently gotten a line of credit for the same thing, or similar. Planning to build a new house in 2-3 years and will be putting up a pole barn and working to finish it as well and dirt work on the property between now and then.
Local bank gave me a 15k line of credit, unsecured, interest only pmt, at 6% interest. It took me about 15 minutes to get it done, I was very surprised at the ease of getting it.
This will allow me to get started and pay as I go, I plan to pay it off in big chunks when funds are available.

 

[ffjosh]

I have recently gotten a line of credit for the same thing, or similar. Planning to build a new house in 2-3 years and will be putting up a pole barn and working to finish it as well and dirt work on the property between now and then.
Local bank gave me a 15k line of credit, unsecured, interest only pmt, at 6% interest. It took me about 15 minutes to get it done, I was very surprised at the ease of getting it.
This will allow me to get started and pay as I go, I plan to pay it off in big chunks when funds are available.

Thanks for the help...im going to look into this route

 

[NUTTSGT]

I have the money saved to pay it off. However if something where to come up (medical, car dies ect) Im screwed.

Are you capable of doing the work yourself to finish it off ? Can you do the work in stages ?


Let's say you have somebody frame it up and you finish the roof. Go to HD and buy your shingles on your HD card. You'll get 6 or 12 months (depending on any specials or how much you spend) interest free financing, make the payments to HD on your card. As long as you pay it off before teh time is up, you do not pay any interest. If a car breaks down, you still have your money to fix the car. You're using somebody else money to finish your garage.

Once the roof is done, start on the wiring, buy all you need at HD on the card again, complete and pay it off. Then move on to the insulation following the same pattern. It might take longer but doing it yourself will save money, you're not losing interst money on your savings and you can do it as you like.

 

[ffjosh]

Are you capable of doing the work yourself to finish it off ? Can you do the work in stages ?


Let's say you have somebody frame it up and you finish the roof. Go to HD and buy your shingles on your HD card. You'll get 6 or 12 months (depending on any specials or how much you spend) interest free financing, make the payments to HD on your card. As long as you pay it off before teh time is up, you do not pay any interest. If a car breaks down, you still have your money to fix the car. You're using somebody else money to finish your garage.

Once the roof is done, start on the wiring, buy all you need at HD on the card again, complete and pay it off. Then move on to the insulation following the same pattern. It might take longer but doing it yourself will save money, you're not losing interst money on your savings and you can do it as you like.

The only thing I might be able to do my self is the metal on the outside and the roof. However since Im having the guy do my excavating work, barn and concrete I am getting a deal. So he might take $100 off if I do the metal work.

I will be doing the electrical and plumbing my self.

 

[ffjosh]

Looks like I cant do a line of credit either because my house keeps dropping in value.

I still owe under what its appraised for but not enough to take out a loan

 

[dgreen1069]

Do you own a car that is less than 7 years old and is paid for? My credit union will let me borrow against my car for a much lower rate. I did this a few years ago to buy a used Kubota....the interest rate on a secured loan is about half that of a personal loan.

Have you considered getting a credit card? I know people think credit cards are evil, but they serve a purpose. You could use your cash for the garage and have the credit card for emergencies....you can find cards all day long with interest rates around 9-12% Hopefully you won't need to use the card so you aren't wasting any money....but it's there for emergencies.

 

[ffjosh]

Do you own a car that is less than 7 years old and is paid for? My credit union will let me borrow against my car for a much lower rate. I did this a few years ago to buy a used Kubota....the interest rate on a secured loan is about half that of a personal loan.

Have you considered getting a credit card? I know people think credit cards are evil, but they serve a purpose. You could use your cash for the garage and have the credit card for emergencies....you can find cards all day long with interest rates around 9-12% Hopefully you won't need to use the card so you aren't wasting any money....but it's there for emergencies.

Ya I have a credit card for gas I just pay it off every month.

I have a 6 year old car. Its only worth $5k at the most which actually might help. Really thats my only option.

I just got a email that my credit was too low for a $5k personal loan My credit is 1 point under excellent in the email

 

[JakeKohl]

Im getting excavating work done, and a 24x30 shop built with concrete for $14k. Cheapest price for the quality. Ya I could get a $7k Barn but there quality *****.

I do not believe in loans and do not want one.

However im trying to start a family and building this shop is going to make me poor.

Im looking for a $10-$15k personal loan. Something with a 5 year loan with no penatles if I pay it off early.

Ideas? "Money is cheap" these days

Note: I am not refinancing.

I'm not sure why you are boxing yourself in like this - refinancing or leveraging your property is probably the most economical way to get a loan with low interest. Depending on how much you have in equity on your house, setting up a line of equity with your mortgage company may be the most flexible way to go - you use only as much as you need and only pay interest on what you've taken out of the equity. I have a $20k line of equity on my house that I can use at will and the interest is prime rate + 1% (I keep the balance at $0...but it's there should I need it). You can write checks against it or do online transfers...probably won't cost you anything beyond a property assessment to setup.

The other good option is to refinance your property. Interest rates are still low and you may actually SAVE monthly (short term) and long term (depending on the difference in existing/new interest rates) cash by doing this. I refinanced when I built my garage to get the seed money to start...I put another three years on my 15yr mortgage pay-off date (since I last refinanced) but, combined with the lower interest rate, I borrowed a substantial amount of cash and my monthly payment decreased and I made very little impact on the long term money owed.


EDIT - aaa...I see that you have a property value issue...that doesn't make these options good.

 

[ffjosh]

my only other option is to try to find a garage kit cheaper and have someone frame it up and I will finish it from there.

Really the framing and concrete is the only thing I can not do.

Not sure what a 24x30 garage kit costs but my buddy just told me he got his 40x60 framed, metal, garage door ect for $1500. Took them 3 days

 

[ffjosh]

I'm not sure why you are boxing yourself in like this - refinancing or leveraging your property is probably the most economical way to get a loan with low interest. Depending on how much you have in equity on your house, setting up a line of equity with your mortgage company may be the most flexible way to go - you use only as much as you need and only pay interest on what you've taken out of the equity. I have a $20k line of equity on my house that I can use at will and the interest is prime rate + 1% (I keep it at $0...but it's there should I need it). You can write checks against it or do online transfers...probably won't cost you anything beyond a property assessment to setup.

The other good option is to refinance your property. Interest rates are still low and you may actually SAVE monthly (short term) cash by doing this. I refinanced when I built my garage to get the seed money to start...I put another three years on my mortgage pay-off date but, combined with the lower interest rate, I borrowed a substantial amount of cash and my monthly payment decreased.

Thats my problem.

original loan $150k, appraised for $180k
I just refinanced for 2% lower - Loan $141k, appraised for $160k

My house value is dropping faster then I pay it off

Im afraid to refinance again because what if it catches up to me.

I know there is a difference between appraised amount and what you can sell it for but the banks are being picky. My house has been updated, the yard looks alot better, but it went down

 

[GarageEnvy]

You won't like my advice and I've got my flame suit on but it sounds like the timing isn't right for you to do this.

If you're trying to start a family and your cash reserves are around $15,000, I would try and build that up more rather than go into debt or spend more. But since I doubt that alternative is all that appealing consider this....

If your new 30 year loan of $141,000 has an interest rate of 4% (I'm guessing) then you have a payment of around $673.

If you take out a 5 year personal loan/line of credit, peer lending, etc. loan at say 8% (again, guessing) you'll have a payment of $304.

If you took that $304 and put it toward paying down your existing loan balance you would take 13-1/2 years and almost $50,000 off in payments. In fairness this does include making the additional $304 in payments for an additional 11-1/2 years beyond the 5 year loan.

You can play with the real numbers but I will tell you that my wife and I used this approach and paid off a 30 year loan in 9 years. We took 2 trips and had 3 kids during that time period. We almost never went out to eat or to the movies, rarely bought new clothes and basically cut discretionary spending to a minimum. The savings in interest more than paid for the shop, even if I add in the tax break. For us, it was well worth the sacrifice.

 

[ffjosh]

You won't like my advice and I've got my flame suit on but it sounds like the timing isn't right for you to do this.

If you're trying to start a family and your cash reserves are around $15,000, I would try and build that up more rather than go into debt or spend more. But since I doubt that alternative is all that appealing consider this....

If your new 30 year loan of $141,000 has an interest rate of 4% (I'm guessing) then you have a payment of around $673.

If you take out a 5 year personal loan/line of credit, peer lending, etc. loan at say 8% (again, guessing) you'll have a payment of $304.

If you took that $304 and put it toward paying down your existing loan balance you would take 13-1/2 years and almost $50,000 off in payments. In fairness this does include making the additional $304 in payments for an additional 11-1/2 years beyond the 5 year loan.

You can play with the real numbers but I will tell you that my wife and I used this approach and paid off a 30 year loan in 9 years. We took 2 trips and had 3 kids during that time period. We almost never went out to eat or to the movies, rarely bought new clothes and basically cut discretionary spending to a minimum. The savings in interest more than paid for the shop, even if I add in the tax break. For us, it was well worth the sacrifice.

Nah its true and your right im so close I just need to save $5k more.

 

[Steevo]

I have to agree with GarageEnvy.
This is why I didn't get my shop until I was 55 years old. My wife and I spent years building up equity, refurbishing, remodeling, then moving and doing it again.
We finally bought our "last" house, paid it off, and then I built a shop, using cash for every step.
$15k isn't a sufficient nest egg for a couple, much less a family. If you don't have adequate credit rating or equity to have multiple options open to you, then that is what you need to focus on first.

 

[srmofo]

I got a 25k equity line of credit from my credit union. 2% interest. Its like a checking account where i can take out as much as i want whenever i want. No early pay off penalties

 

[46Nash]

I waited for 5 years before I built my shop to get the money situation right. Build nice emergency fund + investments then whats left over for garage.

 

[GRN96WS6]

Sounds to me like now isn't the time to be looking into it, I know it isn't what you want to hear though.

 

[Jen......]

having same problems here but i dont have the extra money to finish my roof so for now i have a tarp on it thats all i can do till i can afford it

Jen

 

[964haus]

A credit line works pretty good, then when you lumps of money you can throw it down directly on the principle. When you can't pay, you just pay the interest.

^^ This +1. Have used this method for years and as long as you stay on top of paying it down is a great, inexpensive way to do projects.

M

 

[volvo]

..
One option:
If you have the money. CD, savings or IRA secured loan at +2 percent above secured money account interest.

 

[nehog]

...

However im trying to start a family and building this shop is going to make me poor.
...

Or reevaluate your priorities? IMHO, family comes first, and if you need to borrow to build your shop, I don't think that is a good investment in your future.

 

[woodersen]

this topic is ironic. i am/was in your shoes, sort of.

i wanted a shop. i have a little more stashed away than you do. could i keep on saving for the shop and do it cash? sure. do i want to do that? no. i also dont want to wait until im 50 to enjoy a large garage. i am 32. i do have a family. i bought this house a year ago. 1 yrs later i pulled out some equity the house, the house appraised for over 30k more than what i paid and i when i bought i put 20% down so i am sitting on over 65k in equity on the house. i was very fortunate to buy this house. i pulled a 2nd mortgage on the house. im not ashamed to say it. alot of people on here think if you borrow for a shop you should be castrated. to those people, i will say mind your business. they dont help you make your money, only you can decide how you want to spend it. i was able to borrow money for the shop at the tune of 225$ a month for 15yrs. (even if i went the whole 15yr, the total price of the loan divided by sq/ft is still cheaper than what some people pay in diffrent parts of the country) i dont plan to go the full term. less than 5 yrs is the plan. why spend your money and deplete your savings when you can borrow and keep your safety net., at the price of whatever interest rate you get. i would not get a personal loan, those rates are probably 10% if u can even get a personal loan these days. i will have my mortgage and my shop for under 800 a month. and worse case, have it paid off before im 46. (worst case) the money just hit my savings acct today, and the ground breaking on the shop starts monday.

in the bigger picture, before we moved here, i was living in a smaller house, for more money, and i had to pay for a 10x20 storage unit (125/month). i will have the shop for basically 100 more a month than i was paying in RENT , a little over a year ago.

i say go for it, enjoy life while you can. dont wait until you are in your 50s. good luck.

 

[woodersen]

wells fargo is also offering a 0% interest for a year thru some building vendors. you can take advantage of that and pay it off in a year once u get more money saved...that is an option....BUT, PAY IT OFF , because % rate jacks up to like 27% or some ridiculous amount.

 

[dgreen1069]

this topic is ironic. i am/was in your shoes, sort of.

i wanted a shop. i have a little more stashed away than you do. could i keep on saving for the shop and do it cash? sure. do i want to do that? no. i also dont want to wait until im 50 to enjoy a large garage. i am 32. i do have a family. i bought this house a year ago. 1 yrs later i pulled out some equity the house, the house appraised for over 30k more than what i paid and i when i bought i put 20% down so i am sitting on over 65k in equity on the house. i was very fortunate to buy this house. i pulled a 2nd mortgage on the house. im not ashamed to say it. alot of people on here think if you borrow for a shop you should be castrated. to those people, i will say mind your business. they dont help you make your money, only you can decide how you want to spend it. i was able to borrow money for the shop at the tune of 225$ a month for 15yrs. (even if i went the whole 15yr, the total price of the loan divided by sq/ft is still cheaper than what some people pay in diffrent parts of the country) i dont plan to go the full term. less than 5 yrs is the plan. why spend your money and deplete your savings when you can borrow and keep your safety net., at the price of whatever interest rate you get. i would not get a personal loan, those rates are probably 10% if u can even get a personal loan these days. i will have my mortgage and my shop for under 800 a month. and worse case, have it paid off before im 46. (worst case) the money just hit my savings acct today, and the ground breaking on the shop starts monday.

in the bigger picture, before we moved here, i was living in a smaller house, for more money, and i had to pay for a 10x20 storage unit (125/month). i will have the shop for basically 100 more a month than i was paying in RENT , a little over a year ago.

i say go for it, enjoy life while you can. dont wait until you are in your 50s. good luck.

I agree with your assessment. Lots of people look down on others for borrowing to buy "stuff". My attitude is, you only live once and life is short. If I can borrow the money to do or buy things that make me or my family happy, so be it. As long as I can make the payments and not put my families financial well being in jeapardy, I usually go for it. There is a good chance I have single handedly kept a few local banks in business.....but I had fun doing it

 

[pmiranda]

I have another "reality *****" option:
Once you have kids, it'll be several years until you'll have free time to spend building or using the shop, unless you're going to actually work out of it.
Plus, depending on how many kids and the size of your current house, you may find yourself wanting to move and then the shop you just spent money on is practically worthless.

We thought our previous house was plenty big until our son was born and we got more family visiting and needing a place to stay. We ended up moving to a bigger house that luckily had a bigger garage, but not big enough for anything more than a scissors lift and definitely no room for project cars or bikes. (Stupidly of me, I didn't insist on a lot with room to build onto.) Luckily I keep my race car with a guy for next to no cost, but it's a pain to do anything on it since he's over an hour away. Now that we've got my son in a school we really love we don't want to move our main house so we're kinda stuck here, even ignoring the fact that we'd probably lose money on a move. (Not that we want to go through moving again for several years anyway.)

Hopefully your situation is different, but I thought maybe you could gain some benefit from my experience

 

[nirion]

I agree with your assessment. Lots of people look down on others for borrowing to buy "stuff". My attitude is, you only live once and life is short. If I can borrow the money to do or buy things that make me or my family happy, so be it. As long as I can make the payments and not put my families financial well being in jeapardy, I usually go for it. There is a good chance I have single handedly kept a few local banks in business.....but I had fun doing it

I agree.

I wouldn't borrow for things like vacation and such, and I have no credit card debt, but I did borrow to build my shop. I am fine making payments for a few years to have it sooner with reasonable interest rates (yes, I could have made the payments to myself and built in 5 years). The local Farm Credit gave me a loan for $19,000 on a 5 year loan in 2011 and pay extra each month. So interest will be less than $2000 and building materials could go up that much by the time I had it all saved.

I would check with Farm Credit if there is one near you, or a credit union. Good luck

 

[woodersen]

I agree.

I wouldn't borrow for things like vacation and such, and I have no credit card debt, but I did borrow to build my shop. I am fine making payments for a few years to have it sooner with reasonable interest rates (yes, I could have made the payments to myself and built in 5 years). The local Farm Credit gave me a loan for $19,000 on a 5 year loan in 2011 and pay extra each month. So interest will be less than $2000 and building materials could go up that much by the time I had it all saved.

I would check with Farm Credit if there is one near you, or a credit union. Good luck

Borrowing is fine if one plays cards right.....best buy card for new tvs computers at 27% interest is foolish.....0% for 60 months for a car is smart borrowing. Seems like guys on this site really frown on borrowing for a shop, why i dont know.

 

[aojo]

You should be able to use a savings account in a Savings and Loan as collateral for a line of credit with them. You can make the load payment from your monthly revenue and if you are short that month, authorize the S&L to draw the payment from the savings account. That gives them a comfort level and should only have a hold on your savings equal to your loan balance.

 

[KPSquared]

Borrowing is fine if one plays cards right.....best buy card for new tvs computers at 27% interest is foolish.....0% for 60 months for a car is smart borrowing. Seems like guys on this site really frown on borrowing for a shop, why i dont know.

0% is never 0% with a car. . . You borrowed $35,000 at 0% but the cash price would have been $31,000. . .they'll get their money out of you if you finance. . .period. Save money, pay cash.