I went to my mom with this problem. She suggested I present it to this forum for all of your advice. I have about $4800 left on my car loan. It was financed at a rate of 16%. There is still interest being paid on the loan. If I continue my payments for the life of the loan, I will have paid $5246 (my monthly payment is $584 and the loan should be paid off by the end of December).
I got an offer in the mail from my Citibank CC offering 0% interest if I transfer balance from another account and pay it off by 1/2020 or 0.99% if I pay off the balance by 7/2020. I no balance on this credit card, and have a $10,200 credit limit.
What would you do? Continue to pay the loan, or transfer the balance of the car loan (Citibank sent me checks)? Thank you in advance for any and all advice.
1. Check your existing loan to ensure there are no prepayment penalties and that it is a simple interest loan. It’s possible that given the high interest rate they sold you a product that locked you in for the full interest regardless of when you pay it off. Hopefully not.
2. If simple interest loan, absolutely use the Balance Transfer offer, either one. Why not? Unless you just enjoy padding the pockets of your auto loan bank, this will easily save you a couple hundred dollars.
3. Once you perform the balance transfer, do NOT use the Citibank card for ANYTHING else until you pay the balance transfer off. Know that if you do use it interest begins accruing on any new purchase immediately and doesn’t stop accruing on the new charges until you’ve paid the complete balance off, transfer + new purchases.
3. Use the savings to take your mom out to dinner for sending you here and helping you save $. (You’ll still have money left over
)
2. If simple interest loan, absolutely use the Balance Transfer offer, either one. Why not? Unless you just enjoy padding the pockets of your auto loan bank, this will easily save you a couple hundred dollars.
3. Once you perform the balance transfer, do NOT use the Citibank card for ANYTHING else until you pay the balance transfer off. Know that if you do use it interest begins accruing on any new purchase immediately and doesn’t stop accruing on the new charges until you’ve paid the complete balance off, transfer + new purchases.
3. Use the savings to take your mom out to dinner for sending you here and helping you save $. (You’ll still have money left over
)
@brandonneur wrote:
1. Check your existing loan to ensure there are no prepayment penalties and that it is a simple interest loan. It’s possible that given the high interest rate they sold you a product that locked you in for the full interest regardless of when you pay it off. Hopefully not.
2. If simple interest loan, absolutely use the Balance Transfer offer, either one. Why not? Unless you just enjoy padding the pockets of your auto loan bank, this will easily save you a couple hundred dollars.
3. Once you perform the balance transfer, do NOT use the Citibank card for ANYTHING else until you pay the balance transfer off. Know that if you do use it interest begins accruing on any new purchase immediately and doesn’t stop accruing on the new charges until you’ve paid the complete balance off, transfer + new purchases.
3. Use the savings to take your mom out to dinner for sending you here and helping you save $. (You’ll still have money left over
Agree with all of the above. Also -
Keep in mind that Citi will charge a balance transfer fee of either 3% ($144) or 5% ($240) of the transfer amount - not sure which offer you have (unless you received a no-fee offer?). You'd still save a couple hundred $$ by transferring the balance on the 0% offer. I'd probably transfer it.. if for no other reason than to rid myself of that killer-interest loan.
My car loan is through GM Financial. I went to the websit and did a payoff request. The final amount due is $4851. This payoff request is good for about 2 weeks. And the Citibank offer's fee is $5 or 3%, whichever is more.
Thanks for the advice. I do have to think it over...I don't know if I want that much of a balance on my credit card. But I do know that I would have this balance down as quick as possible.
@brandonneur wrote:
1. Check your existing loan to ensure there are no prepayment penalties and that it is a simple interest loan. It’s possible that given the high interest rate they sold you a product that locked you in for the full interest regardless of when you pay it off. Hopefully not.
+ 100, need to know there is no prepayment penaltie.
2. If simple interest loan, absolutely use the Balance Transfer offer, either one. Why not? Unless you just enjoy padding the pockets of your auto loan bank, this will easily save you a couple hundred dollars.
Will save you $174.50 / ( $144 vs $318.50)
3. Once you perform the balance transfer, do NOT use the Citibank card for ANYTHING else until you pay the balance transfer off. Know that if you do use it interest begins accruing on any new purchase immediately and doesn’t stop accruing on the new charges until you’ve paid the complete balance off, transfer + new purchases.
3. Use the savings to take your mom out to dinner for sending you here and helping you save $. (You’ll still have money left over
Being near the end of the car loan your savings at this time is not large.
3% TF still beats the remaining 16%.
@Kforce wrote:
@brandonneur wrote:
1. Check your existing loan to ensure there are no prepayment penalties and that it is a simple interest loan. It’s possible that given the high interest rate they sold you a product that locked you in for the full interest regardless of when you pay it off. Hopefully not.
+ 100, need to know there is no prepayment penaltie.
2. If simple interest loan, absolutely use the Balance Transfer offer, either one. Why not? Unless you just enjoy padding the pockets of your auto loan bank, this will easily save you a couple hundred dollars.
Will save you $174.50 / ( $144 vs $318.50)
3. Once you perform the balance transfer, do NOT use the Citibank card for ANYTHING else until you pay the balance transfer off. Know that if you do use it interest begins accruing on any new purchase immediately and doesn’t stop accruing on the new charges until you’ve paid the complete balance off, transfer + new purchases.
3. Use the savings to take your mom out to dinner for sending you here and helping you save $. (You’ll still have money left overBeing near the end of the car loan your savings at this time is not large.
3% TF still beats the remaining 16%.
Now I know why I asked for the advice. I appreciate the work that others have done so that I can see it in writing. Thank you for taking the time to do all of these calculations.
