"Takuro Spirit" (takurospirit)
09/30/2015 at 15:12 • Filed to: None
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"Takuro Spirit" (takurospirit)
09/30/2015 at 15:12 • Filed to: None | 1
| 13 |
What say you about this new thing I heard about (and said yes to) in the finance office yesterday: The bank says “Hey, we’ll save you 0.25% on your loan if you have it auto-withdrawl from your bank! AND, we can take a payment out every TWO WEEKS instead of monthly! And on whatever day you choose! So, like, PAYDAY!”
It seemed like a no brainer for me, and I can see why the banks would do so. Its just a practice I had not heard of until recently.
Last thing I copied to my clipboard GIS’d for your time.
Margin Of Error
> Takuro Spirit
09/30/2015 at 15:19 |
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I can answer on his behalf if you are in a hurry
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Takuro Spirit
> Margin Of Error
09/30/2015 at 15:21 |
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No hurry. Deal’s already done. Was just curious.
Ash78, voting early and often
> Takuro Spirit
09/30/2015 at 15:23 |
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Coming from banking/finance, the every two weeks thing is a lot more about lender protection. I don’t personally like it because it make recordkeeping much harder (some months are 3 payments, most are 2 payments...)
However, the discount for auto-draft is more of a win-win. People who auto-draft don’t miss payments for stupid reasons, plus it’s cheaper for you. I’d do that one.
RamblinRover Luxury-Yacht
> Takuro Spirit
09/30/2015 at 15:23 |
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Student Loans, at least, have been doing this a long time. “Ha ha we’re authorized to pull money from your account whenever” is worth that to them.
Jcarr
> Takuro Spirit
09/30/2015 at 15:24 |
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Pretty common from what I remember about working at a bank a few years ago. Every two weeks usually means you pay it down faster since you’re paying 26 times a year instead of 12 (once a month) or 24 (twice a month).
Textured Soy Protein
> Takuro Spirit
09/30/2015 at 15:34 |
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Discounted interest rate because of autopay is a good thing. I do autopay anyway so I’d prefer to get rewarded for it.
I would personally avoid a twice-monthly payment unless it were structured in some way that it provided some kind of advantage to me over a once-monthly payment.
deekster_caddy
> Takuro Spirit
09/30/2015 at 15:41 |
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I’m not a big fan of bi-monthly payment because it’s harder to keep track of. Instead I set up a separate account in my same bank, a bi-weekly transfer from my regular account to that one for half of the loan payment (matching my paycheck direct deposit timeframe), and have the monthly auto-payments come from the different account. That way they can’t “accidentally” overdraw and ruin my checking account, and every couple of months I get to shove a 3rd pay period in there for savings(?). Out of sight out of mind, I never miss a payment and the rest of my account is left alone.
edit - whoops, missed the ‘every two weeks’ part. Yeah, that makes sense since a lot of people get direct deposit every two weeks anyway. You pay off the loan faster as well, with the occasional 3rd payment in a month.
Brickman
> Takuro Spirit
09/30/2015 at 15:53 |
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Mopar or no car :P
Sam
> RamblinRover Luxury-Yacht
09/30/2015 at 16:02 |
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Yeah, so that it’s faster for them to call you on not being able to pay on time.
Captain of the Enterprise
> Takuro Spirit
09/30/2015 at 16:06 |
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Nice water pump
RazoE
> Takuro Spirit
09/30/2015 at 16:19 |
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Depends, I like to send 1 regular payment a month and then I send a second payment that goes solely to the principal payment, NOT interest.
Arch Duke Maxyenko, Shit Talk Extraordinaire
> Takuro Spirit
09/30/2015 at 16:53 |
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I did it, you’re using Connexus aren’t you?
Wobbles the Mind
> Takuro Spirit
09/30/2015 at 16:58 |
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I hate this “clever” financing terms that are going around. You accumulate less total interest payments across the life of the loan by paying every two weeks, but they aren’t doing you a true favor. Just like if someone offers a 3.49% loan and the other guy offers a 2.89% loan with $500 down. It’s usually the exact same total. Financing is becoming too much of a profit generator and the math is too complex for people to do while they are working a deal.
Look at cell phones. They charge you $140 up front then $25 a month for 24 months with zero percent APR on a $600 phone. Meaning, they charge you the total interest rates up front then make you pay off the phone. I wouldn’t be surprised if cars switch to the same system (pay $2,000 down and get a $20,000 car for $333.34 a month for 60 months with 0% APR).