Credit Union Blues :(

[bmacd]

I went to the credit union today where i have my car loan to re-finance a loan through another company. The payoff on my bike (that i was trying to refinance through my credit union) was $9000.86. The purchase price on the bike was $8000. Apparently, the bike only blue books for $7240 now and i have to come up with $1770 before i can get it re-financed. GRRRR!!!!!

-=bmacd=-

 

[StageLeft]

ain't resale a bi*ch?

 

[vi edit]

Don't get mad at the CU. They are only trying to cover their asses in case you default on the loan. Would you loan somebody $10,000 for something that is only worth $8500?

 

[PsychoAndy]

[trancenation] Dont blame the credit union, blame bush!!!! [/trancenation]

Depreciation hits everything. Youre not alone.

-PAB

 

[bmacd]

Originally posted by: Skoorb
ain't resale a bi*ch?

i haven't even had the bike for a month. In all honesty, i haven't even made my first payment on the bike. From the dealership, i was approved for 11.95% (my first un-cosigned purchase). They said that was a pretty awesome APR, given that they see most first-time buyers like myself get approved at a 23% interest rate. My credit union approved me for 9.5%.

-=bmacd=-

 

[kranky]

Are you saying you took out a loan for $8000 a month ago, and today you owe $9000.86? How did the balance go up $1000?

 

[RossMAN]

When I refi with my CU in 10 months I'll have 2 things going for me:

1) The Honda Accord is among the best in it's class to hold it's resale value vs a Ford Taurus
2) I'm paying an extra $200 a month to reduce the principal balance so my balance will be a thousand or two below what it should be.

The only trick is being approved since I have so much damn credit (which is a BAD BAD thing).

 

[bmacd]

Originally posted by: kranky
Are you saying you took out a loan for $8000 a month ago, and today you owe $9000.86? How did the balance go up $1000?

First month of interest and i'd imagine other finance charges. You tell me

-=bmacd=-

 

[RossMAN]

Originally posted by: bmacd

Originally posted by: kranky
Are you saying you took out a loan for $8000 a month ago, and today you owe $9000.86? How did the balance go up $1000?

First month of interest and i'd imagine other finance charges. You tell me

-=bmacd=-

Have you made any payments yet?
When was your last payment made?

The gap could be due to accrued unpaid interest (is your rate really high?) and loan origination fees which is usually $100.

 

[vi edit]

Originally posted by: bmacd

Originally posted by: kranky
Are you saying you took out a loan for $8000 a month ago, and today you owe $9000.86? How did the balance go up $1000?

First month of interest and i'd imagine other finance charges. You tell me

-=bmacd=-

Doesn't work that way. You don't add interest to the principal...at least under a convential loan. If you take out a loan on the first of the month for $10,000, and pay it off the next day, you still only have to pay $10,000 back. You don't pay for all the interest you *could have* accrued if you had ridden the loan out for the full term. Once again, assuming it's a convential loan and not one of those shady rule of 78's(or whatever they are called) loans.

You might have some sales tax and registration in there, but no way should it amount to $1000.

 

[kranky]

Oh man, if you have one of those "rule of 78's" loans, you got screwed. But I can't think of any other way your balance could be $1000 higher in a month.

Look at your loan document and see what it says about prepayment.

By my calculations, one month's interest on an $8000 loan at 11.95% APR should be only $79.67. That's a long way from $1000.

 

[Evadman]

Originally posted by: vi_edit

Originally posted by: bmacd

Originally posted by: kranky
Are you saying you took out a loan for $8000 a month ago, and today you owe $9000.86? How did the balance go up $1000?

First month of interest and i'd imagine other finance charges. You tell me

-=bmacd=-

Doesn't work that way. You don't add interest to the principal...at least under a convential loan. If you take out a loan on the first of the month for $10,000, and pay it off the next day, you still only have to pay $10,000 back. You don't pay for all the interest you *could have* accrued if you had ridden the loan out for the full term. Once again, assuming it's a convential loan and not one of those shady rule of 78's(or whatever they are called) loans.

You might have some sales tax and registration in there, but no way should it amount to $1000.

Not have $1000? sure you could. Easily. Tax in my area is 8.25% which would be $742.50. Then registration is $75, Doc fee is $75. there. You got $900.

Or the dealer could have done what they tried to do to me. We agreed on $35 out the door with the extended waranty. But the papers I was asked to sign magicly had $37 on them. Opps, it was a typing error they said. Well, opps, but I am going to a different dealer. Goodbye.

 

[kranky]

I guess it would be good to clarify what your loan amount was. You said the purchase price of the bike was $8000 - but how much did you borrow and how long is the loan for?

 

[Evadman]

Originally posted by: kranky
I guess it would be good to clarify what your loan amount was. You said the purchase price of the bike was $8000 - but how much did you borrow and how long is the loan for?

The loan was for $9000 ( in his first post). The length is undetermined. but at that interest, I am thinking 48 months.

<edit>
stupid spelllling errors..

 

[vi edit]

Heh, I'm used to 5% or 6% sales tax

 

[Vic]

Originally posted by: vi_edit
Doesn't work that way. You don't add interest to the principal...at least under a convential loan. If you take out a loan on the first of the month for $10,000, and pay it off the next day, you still only have to pay $10,000 back. You don't pay for all the interest you *could have* accrued if you had ridden the loan out for the full term. Once again, assuming it's a convential loan and not one of those shady rule of 78's(or whatever they are called) loans.

You might have some sales tax and registration in there, but no way should it amount to $1000.

Sorry, but you are wrong. On conventional loans, you always add interest to the principal, especially when calculating payoff. Interest never sleeps and works in arrears, i.e. you take out the loan, interest automatically begins to accrue beginning with the first day, then your payment covers that interest plus a small amount of principal and so forth each payment/month. With a regular fixed-interest/fixed-term/fixed-payment installment loan, you pay more interest in the initial payments and then as the principal reduces, you pay less interest (because less interest accrues on a lower principal) and more principal as time goes on, until the loan is paid off. This is why the first payment is almost entirely interest and the last payment is almost entirely principal.
Still, a thousand dollars of interest in only one month on that small of a loan would be excessive to say the least. Something doesn't smell right here. You might want to check your loan papers, bmacd...

 

[RossMAN]

bmacd - I'd be really interested to see what your promissary note and loan disclosure agreement says because $1,000 is quite excessive.

Call your credit union where your loan is currently financed and ask them these questions:
1) What is your interest rate?
2) What is your term (48, 60, 72 months, etc.)?
3) What is your current principal balance (NOT PAYOFF BALANCE)?
4) Are there any outstanding charges such as loan fees, late fees, etc.?
5) What is your payoff balance (principal, plus outstanding interest plus any outstanding fees)?
6) Is your loan a rule of 78's or simple interest loan?
7) When was your last payment made and for how much?
8) From that last payment how much $ went to interest, how much $ went to fees and how much $ went to principal.
9) Has your credit union tacked on any VSI insurance to your car? I can't remember what it means but it's when you don't have auto insurance, they go through a company like Progressive and tack on their own insurance cover which is VERY EXPENSIVE!

After you get answers to those questions it should help us understand a little better why there is such a huge difference.

 

[kranky]

bmacd, are you done with this thread?

 

[bmacd]

lemme get this linux box working and i'll post the info. Thanks for keeping it alive

-=bmacd=-