By: Revanche

Project: Auto Loan Payoff

July 12, 2006

Since I can’t pay off my parents’ auto loan for them (a regular refi won’t work because they are upside down on the loan), I’d like to see if creative juggling can reduce the amount of interest they will ultimately have to pay. I’ve only ever done straight 0% Balance Transfers before, so I have no idea how this will work out, but it’s worth a try… Well, it’s late so just a few details to start.

My concerns are: 1) the difference between way auto loans work vs. credit cards
2) Taking on a huge chunk of unsecured debt

I’ve looked at several of my cards that I don’t use for anything to gauge the transfer offers, and here are the options (will definitely consolidate credit lines as necessary):

Chase 1
Available Credit: $5000

Offers
0.99% Fixed APR until the first day of your billing cycle that includes 1/1/07. (Respond by: 8/31/06)
5.99% Fixed APR until the balance is paid in full. (Respond by: 8/31/06)
7.99% Fixed APR until the balance is paid in full with no transfer fee. (Respond by: 8/31/06)

Chase 2
Available Credit: $7000

Offers
7.99% Fixed APR until the first day of your billing cycle that includes 1/1/07. (Respond by: 7/31/06)
7.99% Fixed APR until the first day of your billing cycle that includes 2/1/07. (Respond by: 8/31/06)
Chase 3 (This is my regular use card – go figure – but I can switch to using another card for regular use, probably my Citi Plat Select or something.)
Available Credit: $6700
Offers
0.99% Fixed APR until the first day of your billing cycle that includes 01/01/07.(Respond by:08/31/06)
4.99% Fixed APR until the balance is paid in full.(Respond by 08/31/06)
6.99% Fixed APR until the balance is paid in full with no transfer fee. (Respond by: 8/31/06)
7.99% Fixed APR until the balance is paid in full with no transfer fee. (Respond by: 7/31/06)
1.99% Fixed APR until the first day of your billing cycle that includes 12/1/06. (Respond by: 7/31/06)
5.99% Fixed APR until the balance is paid in full. (Respond by: 7/31/06)
BT Fee: $75 max

Chase total available: $13700 fully fundable

 

Charles Schwab 1
Available Credit: $6000
Offers
Promotional 0% APR on all balance transfers through your March 2007 statement.

Charles Schwab 2
Available Credit: $380

No Offers
BT FEE: $75 max
Schwab total available: $8880

 

Account Summary
Payoff Amount: 13,695.76, let’s say 13700
Payment Amount: 418.05
Interest Rate: 9.6%
Remaining number of months: 26
Total Interest that would be paid for the last 26 months (the number to beat): 2684.17

2 Responses to “Project: Auto Loan Payoff”

  1. Kira says:

    You seem to be taking on a LOT of your family’s debt – I would really reconsider. I know you want to do right by them, but you are making their burdens your burdens, and they’ve had a lot more time to collect burdens, you know?

    You might look at Prosper for a loan in their names – if they can be counted on to pay in the future, they can probably get a not-horrible interest rate without resorting to credit cards.

  2. I agree that this is a huge amount to take on, and I think that ultimately that’s why I’m not going through with any of these options. It’d just be too much and too much stress worrying about it. It’ll just have to percolate for a while longer, see if maybe Prosper would work out.

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