Taxi Medallion Loan Frequently Asked Questions

What does “Amortize” mean?
 “Amortize” means to fully repay a loan gradually over time.

What is a “Fully Amortized Loan”?
An “Amortized Loan” is a loan with regularly scheduled periodic payments of both principal and interest that will fully repay the loan by the end of the loan term.

What is a “Balloon Loan”?
A “Balloon Loan” is a loan which does not fully amortize over its term. It has lower regularly scheduled periodic payments of both principal and interest, but those payments will not fully repay the loan by the end of the 3-year loan term. This will leave a large balance, or “balloon” payment due at the end of the term to pay off the remaining principal balance.

Can I make larger payments to my loan at any time without a penalty? 
Yes!  You can make more than the minimum monthly payment at any time without any fees or penalties. 

Are there fees and/or any penalties for paying off my loan in full before it is due?
There are NO fees or pre-payment penalties for paying off your loan early.

What are the fees to obtain a medallion loan from the credit union?
San Francisco Federal Credit Union charges a fee of $795 to originate your medallion loan.

How much can I borrow?
You can borrow up to 80% of the value of the taxi medallion. Under the Pilot Program, the SFMTA Board has set the purchase price (or value) of the medallion at $250,000. So, the maximum loan amounts to $200,000. (Medallion value of $250,000 X 80% = $200,000.)

Do I need to have a down payment?
Yes. To obtain a medallion loan, you must have a minimum 20% down payment. Under the pilot program, that equals $50,000. (Medallion value of $250,000 X 20% = $50,000.) The borrower must have at a minimum, 5% or $12,500 of his or her own funds. The remaining 15% may be acceptable from other sources. The only acceptable sources would be a gift from a family member; or, a down payment loan from a source allowed by SFMTA. If you borrow part of your down payment, you must provide the details of the down payment loan to the credit union at the time you apply for the loan.

What type of lease arrangements with Color Schemes are acceptable in order to obtain a loan?

There are only two types of operating arrangements that are acceptable to obtain financing for a medallion purchase.

The two arrangements are:
1) Leasing the medallion to a Color Scheme; or,
2) Having an Owner/Operator affiliate type arrangement that allows the purchase of certain services from a Color Scheme.
To learn more, please review the following PDF document by clicking here.

For more information:

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