Are you the victim of a high interest rate car loan? If so, the following email discussion may help you. Keep reading:
DEAR LoanResources.Net:
I was very impressed by your article titled “8 Point Checklist, Evaluating Lenders Online [http://www.loanresources.org/articles.htm].”
I have tried several sources to refinance my car. I only have 2 more years to pay $245.04 a month. I owe 4,414.00 on the car loan.
This may not sound like a lot of money, but I would like a lower interest rate on my car loan, which is now $16.4% APR.
I still want to pay it off in 24 months, but at a lower rate so I can use the money saved to help pay other bills.
In my internet searches, auto refinance loans require you to borrow more money than I need. I tried looking for unsecured personal loans on your website and they also borrowed more money from me.
I have very good credit and am working to pay some of my bills.
Is there anything you can suggest so I can get a lower rate car loan for less than $5,000? Any help would be appreciated.
Thanks. Geraldine W.
DEAR Geraldine:
I’m sorry I didn’t contact you earlier. I took a couple of weeks off to be with family… Thanks for the compliment on the article!
Anyway, I read your email and have a suggestion or two that I’m happy to share.
SOME THINGS INITIALLY:
one. First, you are paying a very high interest rate at 16.4% APR for a car loan! I am going to assume that your statement about your good credit is accurate. If that’s true, then you do need to fix this.
2. Since you only need $5000, with the intention of paying it off in 2 years or less, I don’t think you should look into a refinance auto loan or home refinance. In fact, the bank will want to lend you much more money, usually at least $25,000. While a refinance or home equity loan offers tax benefits, we’re only talking about interest on $5,000 over the course of 2 years. I have another idea that you may not have considered.
HAVE YOU CONSIDERED?
Have you considered simply putting your auto loan balance on a credit card that has a lower interest rate?
one. Credit cards are, in effect, unsecured lines of credit with financial institutions.
2. They are the perfect financial vehicle for a $5,000 debt transfer, with more flexibility, and you should be able to find an interest rate between 9-11%, and better, on average.
3. PLUS! Once approved, the bank will usually give you blank checks for balance transfers (sometimes they will do this for you directly over the phone)…,
4. AND GUESS WHAT? Most of the time, the incentive interest rates on balance transfers are EXTREMELY low; sometimes zero percent for up to 6 months to a year.
5. PLUS! you can apply for incentive cards that give you rewards for your spending… free airline miles, cash back programs, etc. I use American Express Blue and get up to 3% cash back on everything I spend. So for $5,000, 3% cash back, AMEX(TM) pays me $150.
How do you like apples? The bank pays YOU to borrow money.
RECOMMENDED PLAN OF ACTION:
So Geraldine, this is what I recommend you do:
one. Return to our website and explore the credit card offers we recommend [http://www.loanresources.org/credit-cards-with-rewards-1.htm]. We’ve selected what we think are the best deals, and there are a LOT of them, so consider this a much-needed shopping trip! Pay special attention to our links for “incentive cards”. We have two pages of them.
2. Request the card or cards that best suit your tastes and needs. There are so many great reward cards. Limit yourself only to your imagination.
3. Get approved, receive the card, and receive balance transfer checks.
Four. Pay the loan to the bank 16.4%!
5. Pay off your credit card loan (with extremely low rates and incentives), the way you like!
…And enjoy the fact that you just made a great financial move, saved money, made money, and gave yourself the flexibility to manage your debt at your own pace…
Hope this helps… Let me know how it all works.
We have enjoyed bringing you this information and wish you the best of luck in your endeavors. Always remember to seek good advice from those you trust and never turn your back on your own common sense.
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