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pandydurai · Sep 17, 2007, 07:15 AM

Hi,

I owned a new 2007 Honda civic and have a car loan on that for an amount of 21K. This loan is for 5 years. I had been paying the installment about $340 per month without fail for the past 9 months. The current interest reate is 8.5% and I have a co-payer since I was not having credit score at that time.

I am getting some credit card offers now. Is there a way to save some money?:D

If you know please... :p

Thanks

Pandy

ScottGem · Sep 17, 2007, 08:17 AM

Generally credit card interest will be higher. If you can get an account with a large credit line and do a transfer with a loe rate for the life of the transfer you might be able to save money.

If you own a home, a home equity loan might be a solution, the interest rate would be about the same but it would be tax deductible.

Dr D · Sep 17, 2007, 09:41 AM

Join a Credit Union, and check their rates. With 9 months under your belt, the CU might offer a lower rate. If not today, perhaps a few months down the road. Good luck.

KCDave · Sep 17, 2007, 07:37 PM

Originally Posted by pandydurai

Hi,

I owned a new 2007 Honda civic and have a car loan on that for an amount of 21K. This loan is for 5 years. I had been paying the installment about $340 per month without fail for the past 9 months. The current interest reate is 8.5% and I have a co-payer since i was not having credit score at that time.

I am getting some credit card offers now. Is there a way to save some money?:D

If you know please....:p

Thanks

Pandy

Ya, sell the car and buy one for 10K or even 5K :D

AndyWilliams · Sep 19, 2007, 08:15 AM

Go visit a Credit Union - you should have established some decent credit by now. See what type of a break you can get on your interest rate and your payment. If this doesn't work, it may be time to check the KBB value on your car at New Car Prices | Used Car Values - Official Kelley Blue Book Site and see if getting a new vehicle makes sense. I would not recommend transferring any of your current balance to credit cards.

pandydurai · Oct 10, 2007, 06:26 AM

Hi Thank you for your suggestion! :p

Now I recevied an offer from Sovereign /Mastercard with 0% APR till December 2008 if I accept a balance transfer or cash advance. This is for one year.

Just curoius to know what is the risk in it if I take this? I am sure that no financial organization would offer anything without a profit in it..

If I accept this means I should start pay EMI(monthly payment) to this mastercard after one year?

Please suggest.. :)

Pandy

Originally Posted by ScottGem

Generally credit card interest will be higher. If you can get an account with a large credit line and do a transfer with a loe rate for the life of the transfer you might be able to save money.

if you own a home, a home equity loan might be a solution, the interest rate would be about the same but it would be tax deductible.

ScottGem · Oct 10, 2007, 06:33 AM

First, it would depend on the offer. Most balance transfer deals require that you make a minimum monthly payment. And if you are ever late with a payment, the interest rate reverts to the normal rate.

pandydurai · Oct 10, 2007, 06:40 AM

Originally Posted by ScottGem

First, it would depend on the offer. Most balance transfer deals require that you make a minimum monthly payment. And if you are ever late with a payment, the interest rate reverts to the normal rate.

Thank you! :)

I am ready to make monthly payment and my current monthly payment is $350 for another 4 years.

If I accept this balance transfer then can I save some money in this regard considering the fact that I need not pay interest for another one year. But then how this mastercard make profit? So far I was paying my intallment in time.. and I would do the same in future.

ScottGem · Oct 10, 2007, 06:50 AM

The idea for them is they get a customer and if you don't pay the balance in full prior to the end of the promotion period the interest gets jacked up. You need to know what the interest will be. But I would NOT do this unless you can pay off the balance before the promotion ends. Either by taking another loan or whatever.

excon · Oct 10, 2007, 06:51 AM

Hello pandy:

They are BANKING on the fact that you might be ONE day late at some point in time. THEN they raise your interest rate WAYYYY beyond where it is now. The next thing, is that if you haven't paid ALL your car payments by the end of the first year, the interest rate will go sky high on the balance that you owe. Of course, you WON'T have paid off all your car loan in that time, and you'll be screwed.

excon

ScottGem · Oct 10, 2007, 06:56 AM

One other point, you can't use the card for anything else while you have a promotional balance. They will always apply your payment otwards the promotional balance and any purchases balance will continue to accrue and COMPOUND interest.

pandydurai · Oct 10, 2007, 07:01 AM

Originally Posted by ScottGem

One other point, you can't use the card for anything else while you have a promotional balance. They will always apply your payment otwards the promotional balance and any purchases balance will continue to accrue and COMPOUND interest.

Thank you! :) your comments were so helpful... I am able to understand how this stuff works:p Thank you for your valuable suggestions.

Pandy

nguyen611 · Nov 7, 2009, 05:53 AM

Hi Pandy,
One way for you to save money on your car loan without having to make any major changes is to adjust the frequency of your payment. This simple yet effective method can be easily applied to your car loan which will save you quite a bit of money. For more details on this technique and its explanation go to the following link:

http://www.mooneytalk.com/2009/10/how-to-save-money-on-your-car-loan.html

I hope this helps and good luck.
-Brian