How do loans work?

[GoldenGuppy]

Hey guys, I put in an application over the phone for the USC Credit Union loan of 30,000 dollars--for a new car.

I am still waiting for approval and my interest rate.

I am curious what happens after I get my approval? Will there be a waiting period? Or can I just get the money immediately? Will it go to my bank?

Thanks!

><GG)

 

[MacBaine]

I am curious what happens after I get my approval?

You'll buy a new car, pay interest for 10 years until you realize that you still have to pay off $25,000 on a loan for a car that's now only worth $2000. 😛

 

[Description]

Paying for money == bad

Save, pay cash.

 

[Rudee]

I couldn't imagine getting a such a large loan for something like a car, which depreciates quicky over time. Like throwing money away.

 

[GoldenGuppy]

The interest is not too bad to me... 3.74% I believe for 36 mo. loan.

I'm willing to go w/ it.

I just am clueless as to how the process works afterwards w/ the credit union

 

[flamingelephant]

You will realize that you should find a dealer who is offering 0% interest and hit your head against a wall for ever thinking about having to pay interest when you dont have to right now

 

[SilentZero]

Well if you get approved they will want to see the purchase order and vehicles VIN number before they send you a check. After they get that, they will send you a check made out to the dealer. I've taken out a few hefty car loans before through credit unions for new cars, and on average it takes about 10-21 days for them to send you the check, if you don't live near a branch.

 

[GoldenGuppy]

Ah okay, thanks SilentZero!

><GG)

 

[Vic]

Originally posted by: Description
Paying for money == bad

Save, pay cash.

:roll:

The total interest over term would only about $1,760.

Are you going to rent for the rest of your life while you save up to pay cash for a house?

 

[MacBaine]

Originally posted by: Vic

Originally posted by: Description
Paying for money == bad

Save, pay cash.

:roll:

The total interest over term would only about $1,760.

Are you going to rent for the rest of your life while you save up to pay cash for a house?

Houses usually increase in value over the course of many years, whereas a car's value decreases dramatically.

 

[mugs]

Jeez, he didn't ask you to judge his decision to finance a car, he just wanted a question answered.

 

[Vic]

Originally posted by: MacBaine

Originally posted by: Vic

Originally posted by: Description
Paying for money == bad

Save, pay cash.

:roll:

The total interest over term would only about $1,760.

Are you going to rent for the rest of your life while you save up to pay cash for a house?

Houses usually increase in value over the course of many years, whereas a car's value decreases dramatically.

So what? The car would depreciate whether you financed it or paid cash. The reason to finance, to be able to acquire and use the item now as opposed to later, is still the same.

And 3.74% is about the same as the going rate of inflation. That means the money is basically being borrower for free. With a rate that low, you're better off financing the and leaving your savings/investments alone, which should be earning a higher rate of return/interest than the cost of the financing. In other words, only a freakin' moron would think that paying cash out of your savings/investments would be better in this case, especially just because the vehicle depreciates.

And SilentZero's answer was essentially correct, except I've seen the check go out the same day. If you're going to finance a car, your credit union is the only way to go (unless you can get ultra-low interest manufacturer's financing).