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hoyleysox
Premium
join:2003-11-07
Long Beach, CA

[Rave] Low interest auto loans

Paid off my car last year, but I just took out a 1.7% interest auto loan from a credit union. I am using the funds to pay off my 6%+ interest rate student loan. Woot!



Rob
In Deo speramus.
Premium
join:2001-08-25
Kendall, FL
kudos:2
Reviews:
·Comcast

Yea, I qualified for a 0% for 48 month auto loan. Decided to take advantage of it when I was car shopping.

I didn't know you could use auto loans to pay off other expenses? I thought they were strictly to be used for automobile purchases.
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hoyleysox
Premium
join:2003-11-07
Long Beach, CA

I was surprised too, I did have to open a deposit account, but refused the life & disability insurance. My car is just shy of five years old, has > 75K miles and I do not consider it worth the 100% of KBB offered they offered. The longest term available at 1.79% was 36 months btw.



AVD
Respice, Adspice, Prospice
Premium
join:2003-02-06
Onion, NJ
kudos:1
reply to Rob

said by Rob:

I didn't know you could use auto loans to pay off other expenses? I thought they were strictly to be used for automobile purchases.

it's an accounting trick.
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--Standard disclaimers apply.--
google this "(sqrt(cos(x))*cos(200*x)+sqrt(abs(x))-0.7)*(4-x*x)^0.01, sqrt(9-x^2), -sqrt(9-x^2)"


r81984
Fair and Balanced
Premium
join:2001-11-14
Katy, TX
Reviews:
·row44

1 recommendation

He took a car loan out on his car (that he already owned) through a private bank.
He cashed the check they gave him and paid off his student loans.
The bank could care less where they money went as long as they have the clear title to a real car of value to tie the loan to.
If you get financing through a private bank they just give you a check to spend so you can have cash to pay a dealer or private seller.

Think of it like he bought the car from himself or like he took out a 2nd auto loan on a car he already owned.

I did the opposite when I was in college. I used a low interest student loan to buy a car. Best deal ever as I have driven the car for almost 6 years with no problems. (2004 Corolla)
--
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Thespis
I'm not an actor, but I play one on TV.
Premium
join:2004-08-03
Keller, TX
reply to hoyleysox

Low interest car loan is great, but here's what you should really be celebrating:

quote:
I am using the funds to pay off my 6%+ interest rate student loan.
Kick Sallie Mae to the curb! Bitch...
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cowboyro
Premium
join:2000-10-11
Shelton, CT
reply to hoyleysox

said by hoyleysox:

Paid off my car last year, but I just took out a 1.7% interest auto loan from a credit union. I am using the funds to pay off my 6%+ interest rate student loan. Woot!

Did you get the loan from Shark Loans??? 6% these days???
My wife's interest rates range from -0.14% (that's no mistake, NEGATIVE 0.14%, although it adjusts to 0) to some 2.5%...


Thespis
I'm not an actor, but I play one on TV.
Premium
join:2004-08-03
Keller, TX

These sound like old student loans. Mine were from the very early 90's and had about the same rate until I consolidated them.
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Fast. Cheap. Safe.
Pick two...



Omega
Displaced Ohioan
Premium
join:2002-07-30
Somerset, NJ
reply to hoyleysox

My car loan rate in 2008 was 0.9%. My current student loans are 3.5%. They keep on going up because they are variable and I am quintupling the monthly payments (though the loan company won't admit this).

Anyway, you are still paying interest at 1.7%, which I agree will save you money, but your interest is no longer tax deductible. Do you still come out significantly ahead once you factor that in?
--
What smells like blue?



aannoonn

@151.190.0.x
reply to r81984

I guess another way to say it is that he used his car as collateral for the loan.



I AM
Premium
join:2010-04-11
Ephrata, PA
kudos:4
reply to hoyleysox

But the rant would be...Why are CD's only paying .25%?!?!!?!


Zoder

join:2002-04-16
Miami, FL
reply to hoyleysox

Good job OP. Can student loans be refinanced at lower rates like mortgages?


hoyleysox
Premium
join:2003-11-07
Long Beach, CA
reply to hoyleysox

said by Omega:

Anyway, you are still paying interest at 1.7%, which I agree will save you money, but your interest is no longer tax deductible. Do you still come out significantly ahead once you factor that in?

Our politicians changed the rules so I no longer qualified for the student loan interest deduction in 2010.
said by Zoder:

Good job OP. Can student loans be refinanced at lower rates like mortgages?

You can "consolidate" loans once in a lifetime, which is not the same as a refi.


Omega
Displaced Ohioan
Premium
join:2002-07-30
Somerset, NJ

Really? Wow I didn't know that. You definitely made the correct decision.
--
What smells like blue?


hoyleysox
Premium
join:2003-11-07
Long Beach, CA

said by Omega:

Really? Wow I didn't know that. You definitely made the correct decision.

I started the thread because I hadn't been aware of the option until recently. Wish I had rolled over the student loan debt earlier.

The biggest con is the higher payment associated with the shorter term. Student loans also have less costly deferment options.


Omega
Displaced Ohioan
Premium
join:2002-07-30
Somerset, NJ

Yea, I had mine reduced a couple years ago when I wasn't making as much money. For the time being, my interest is still tax deductible. I should have the loan paid off by the end of next year. Hopefully my interest should remain tax deducible.
--
What smells like blue?


hoyleysox
Premium
join:2003-11-07
Long Beach, CA

Good for you for paying it off.

I think I should start a rant thread about student loan rates are about to jump to 6.8%, which is high IMO, the government guarantee and the high default fees should outweigh the risk of lenient borrower qualification requirements.



David
I start new work on
Premium,VIP
join:2002-05-30
Granite City, IL
kudos:101
Reviews:
·DIRECTV
·AT&T Midwest
·magicjack.com
·Google Voice

1 recommendation

reply to hoyleysox

I just got done doing this... I had a 5.9% car note on a 2010 traverse I bought last year. Refi through a credit union and got it down to 3.09%.

I come out saving as least $37 a month and will pay a lot less in interest.

The best one I did was when I did it to the avalanche where I took it from 4.24% to 1.99% with pen fed.
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hoyleysox
Premium
join:2003-11-07
Long Beach, CA

don't mind signing up for a high-cost loan for a lower price car if there is no prepayment penalty.



David
I start new work on
Premium,VIP
join:2002-05-30
Granite City, IL
kudos:101
Reviews:
·DIRECTV
·AT&T Midwest
·magicjack.com
·Google Voice

yea I went from an 2003 suburban to a 2010 traverse. The suburban while not bad (and had a dvd player built in) just didn't get better than 14-15 mpg. A lot of times we took the avalanche (2005) as it still gets as least 17-18mpg average. I wanted something that could break the 18mpg barrier and I got that with the front wheel drive 2010 traverse. I average now around 19-20 MPG. Going from 14-15 to 19-20 has been a blessing to the checkbook.
--
If you have a topic in the direct forum please reply to it or a post of mine, I get a notification when you do this.
Koetting Ford, Granite City, illinois... YOU'RE FIRED!!