Underwater loan
I'm really red faced to even ask but if anyone has any ideas I'd be happy to hear. Like many seniors we bought a new Class A when retiring. Things were good back in 2001and we were full timing. Put a ...
Forum Discussion
westernrvparkowner wrote:
If you want out, go to your local bank or credit union and get a loan to cover the difference between what you can sell it for and what you owe. Then sell the sucker.
Such a loan would either use the RV as collateral or effectively amount to a large credit card debt. In the former case, she still wouldn't be able to sell the RV without paying off both loans - it would have two liens on it instead of the one it currently has. In the latter case, she's stuck with a 50K high-interest loan - not a good idea.
Trading it in has the advantage of potentially getting something useful, but would immediately result in the new RV being VERY under water. All that happens when someone trades in an under-water vehicle on a new one is that the new loan is made for the outstanding balance of the new vehicle plus the loan amount less trade-in value of the old vehicle. It's only good in that it gets something new - in the long term it creates an even bigger problem.
Probably the best option is to over-pay on the RV loan (as much as possible) in order to pay it down faster and get it back above water, then sell.
