Pay off
#22
You should have either bought your USED Z
1. In cash
2. Bought a cheaper , yet still reliable car.
#30
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What about first time buyers? My interest rate is 12.5 cause I'm a first time buyer but I plan on re-financing soon.
What about those who wants to try to fix there credit by starting off with high interest then refinancing?
#31
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Why do you hate banks? You are the one that bought a car you couldn't really afford and signed the note to the bank. No one to blame here but you. Since apparently the concept of an amortized loan isn't being taught in school, you kids really need to educate yourselves or you will continually be poor.
#32
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Im not blaming anyone - just the fact whoever got together and came up with the banking system were very smart with the concept of taking money. My main question was what was the difference between a Base and Daily intrest rate, not a analysys on whos blaming who. And your telling me you have NEVER financed anything in your live, that you pay CASH for everything, like your house ? If thats the case please give me break, not everyone has cash flowing out of there pockets to do something like that.
Interest can be confusing. The nice thing is that compounding interest can work both for you and against you. However, your point is correct that often banks compound deposits monthly, but lenders compound interest daily.
The most accurate way to compute a loan amortization schedule would be to
base the interest on the actual number of days in the payment period. If you pay monthly, this would vary from 28 to 31 days. Each day's interest would be 1/365th of the nominal interest rate. That interest is accrued and added to the principle for the next days interest calculation. If your lender will compound weekly, you will save money. If they will compound monthly, you will save even more. This is why in the US, it is required that lenders give the effective APR for loans. This allows you to compare loan products that have different terms.
BTW, the above is a reason why bi-monthly payments save you so much interest. It cuts the amount of interest you are paying the interst in half over a monthly payment system.
Hope that helps.
#35
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I agree! I wanted the car, the monthly wasnt too high and figured I was getting a good deal for a '03 Track. I've learned, no big deal, thanks for everyones reponses.
#37
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Here is a great tool for showing you the effect of interest on a principal. Just plug your numbers in, and hit the "Show/Recalculate Amortization" button.
http://www.bankrate.com/brm/auto-loan-calculator.asp
http://www.bankrate.com/brm/auto-loan-calculator.asp
#38
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I don't understand the idea of "pay cash or don't buy a car." I understand not signing up for 12% interest, but not financing a car just because it depreciates seems ridiculous. The thing is CASH depreciates too. To the tune of what, maybe 3% a year? Inflation is not negligible. Obviously banks are profiting, but loans under 7% or so just aren't that punishing.
I understand financing and how banks make their product perfectly adequately, the point is that just because you're paying more over the life of the loan and delivering a profit to the bank doesn't mean its a dumb thing to do.
I understand financing and how banks make their product perfectly adequately, the point is that just because you're paying more over the life of the loan and delivering a profit to the bank doesn't mean its a dumb thing to do.
#39
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you don't have to understand the mentality - there are some out there who are well off enough to just flat out pay cash for cars they want and it ultimately is more responsible.
financing is available for those of us who don't have 20k+ stashed away, or are too impatient to wait. it works out well in most cases but a lot of people take loans they shouldn't. my interest rate is 5.75% and even that will add multiple thousands of dollars onto a car loan. it's worth it to me and that's all that matters - no ones calling you stupid for financinig.
financing is available for those of us who don't have 20k+ stashed away, or are too impatient to wait. it works out well in most cases but a lot of people take loans they shouldn't. my interest rate is 5.75% and even that will add multiple thousands of dollars onto a car loan. it's worth it to me and that's all that matters - no ones calling you stupid for financinig.
#40
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you don't have to understand the mentality - there are some out there who are well off enough to just flat out pay cash for cars they want and it ultimately is more responsible.
financing is available for those of us who don't have 20k+ stashed away, or are too impatient to wait. it works out well in most cases but a lot of people take loans they shouldn't. my interest rate is 5.75% and even that will add multiple thousands of dollars onto a car loan. it's worth it to me and that's all that matters - no ones calling you stupid for financinig.
financing is available for those of us who don't have 20k+ stashed away, or are too impatient to wait. it works out well in most cases but a lot of people take loans they shouldn't. my interest rate is 5.75% and even that will add multiple thousands of dollars onto a car loan. it's worth it to me and that's all that matters - no ones calling you stupid for financinig.
My only point is that folks should realize that financing a sports car, or even buying a sports car to begin with, should be considered and extravagant expense and should be lumped in with the rest of your "entertainment" budget. Transportation can be handled better for a lot less money by buying a used econobox. Folks buy Zs for the entertainment value. When you finance one, you simply are making that entertainment that much more expensive.
I prefer to pay outright for my entertainment, whether that be a movie, a nice dinner, a vacation, or a sports car. Borrow money for the essentials; house, schooling, basic transportation if needed, and business capitalization, but pay as you go for everything else.