Is it legal to borrow money as "personal loan" from another credit union to payoff a "car loan" with my current one?

I financed a car for $2,800, my current balance is $2,064. If I ask to borrow $2,000 as a personal loan, they won't know what I did with it. I think they may still get me buy asking me for an asset to take if I fail to repay the loan, so it may be a waste of time.

Best Answer:

Flatulent Tea Bag Face: It's not a good idea, but it's not illegal. Taking more credit is only illegal if you are telling a creditor you can't pay them and paying less than you are supposed to, that would be fraud, otherwise you can borrow as many times as you want as long as you tell the new creditor that you already have other loans outstanding. Like I said though, it's never a good idea to borrow to pay something else.

Other answer:

Flatulent Tea Bag Face:
If the interest rate is lower, you could pay off a car loan with a credit union loan. You might even go to the credit union and see if they would finance the car loan with a car loan.
Alpha Beta:
Why would you take a loan to pay off a loan? If you are trying to reduce your interest rate, refinance the loan. A personal loan generally carries a higher interest rate than an auto loan.
TrumpCareFails:
The Interest rate for a Personal Loan is typically far higher than for an Auto Loan….why would you even want to DO such a thing?
tro:
unless you are asked what you will be using the $2K for at the credit union they won't know what you will use the money for
being a personal loan of this amount obviously you are in good standing with this credit union but if they don't know you it is unlikely they will loan on a personal basis
Jessica:
it's not a good idea, but it's not illegal… taking more credit is only illegal if you are telling a creditor you for the life of me cannot pay them and paying less than you are supposed to, that would be fraud, otherwise you can borrow as numerous times as you want as long as you tell the new creditor that you already have other loans outstanding… like i said though, it's never a good idea to borrow to pay something else…
sarah:
Hi
Wayne Z:
No. It is not illegal.

However……

1) Interest rates on personal loans are normally higher than on car loans.

2) Personal loans are tough to get.

R T:
Yes, that's called "kiting" and is an illegal practice. If you want to change the loan or the lender, refinance the loan.
Honey Child:
yes

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