I mentioned before that I was planning on using a series of 0% balance transfers to pay off my auto loan. If only it were as easy as giving American Honda Finance Corp (AHFC) my Visa number and being done with it. Well, never that simple, but it wasn't too bad either. Here are the details.
My existing loan is a five year loan at 5.64%, . I have been paying well above the minimum payments with the intention of paying it off in about 18 months. It was pointed out to me when I first posted my balance sheet that I was being foolish by not paying off a 5.64% auto loan when I have over $56,000 in ING savings earning 4%. At first I resisted, but finally agreed that I was being foolish. I resisted because my Fiancee and I are hoping to buy a house in the next year or two, and this money would be a major chunk of our down payment. I also resisted because, it's one of those weird psychological things where my brain says, "but I worked so hard to save this money, I can't just use so much of it all at once!"
So, off to the 0% Balance Transfer card search I went. I first applied to Citibank. They approved me for $5300. I spoke with a representative who confirmed that there is no balance transfer fee, and the 0% on the BT is good until April 2007. They agreed to go ahead and send me a check for $5250, which I just received yesterday. My minimum payment will be around $79. I am going to cash it, and as soon as my bank clears it mail send that amount off to AHFC, bringing my balance down to around $12,380.
The next card I applied for was the Chase card. They approved me for $10,500. We like Chase. They, however, would not send me a check. The balance transfer must go to another credit card. So, I gave them my MBNA Visa card number, which has a low balance. I had previously called MBNA to make sure that in the event of overpayment, they will send me a check. Chase agreed to send a BT payment to MBNA in the amount of $10,000. At first they wanted to charge me a fee of 3% of the BT amount. I told them immediately to go ahead and close the account. I was transferred to a supervisor who acquiesced. So, I confirmed no BT fees, no annual fees, 0% interest until July 2007. My minimum payment will be around $200. That will bring my AHFC balance to around $2,380.
I guess I'll go ahead and make a withdrawal from ING for that amount and pay the sucker off. So my payments for my car will go from $416 minimum, plus the additional amount that I was paying monthly, to around $279.
Net result: I will have more cash flow for the next year. I will deposit the money that would be going to my car payment into my ING account, earning 4% (I know I can earn more at Emigrant), and I will pay the card balances in full before any interest kicks in next year. Either that or I will find a new card to BT.
Congrats! Paying your auto loan with money from a 0% bt lessens the pain a bit doesn't it? Rather than paying the entire loan off with cash saved up. Then when it's time to pay the 0% bt off, it still feels crappy, but since there's no option, it doesn't feel quite as bad. A win-win-win situation I guess...I just got my title for my car yesterday at the credit union...so no more car loan! :)
Posted by: financial freedumb | April 11, 2006 at 12:57 PM
Just so you know, having a high balance on those credit cards will not look so good when you go to get your mortgage.
Posted by: Easy E | April 11, 2006 at 01:10 PM
FF - thanks, I'm looking forward to getting my title.
EE - yea, I will pay the CCs off at least two months before I go mortgage shopping.
Posted by: lamoneyguy | April 11, 2006 at 01:25 PM
That is awesome. I am in the process of reducing the interest on my wife's van by 2.5%. I wish I could get to 0% interest with credit cards, but my credit is shot. It would be fine, except that I had to get another vehicle financed late last summer, and it wasn't so great then. They did 9 hard pulls on my credit in one day. I will never by a vehicle like that again. That, almost all by itself, ruined my credit for now. Those should be falling off of there in three months, though, so that will be nice.
Posted by: Dus10 | April 19, 2006 at 09:28 AM
Thanks for this discussion. I'm trying to think like a rich girl and this seems like a great idea.
Posted by: Jessica | March 06, 2007 at 07:23 PM
Smooth! I have aslo heard that you can save a good deal of money on balance transfers getting a new credit card every half a year or so. You know, some of those offers last only for certain period of time. As soon as the time is over you might as well apply for a new card!
Posted by: balance transfer analyzer | March 14, 2007 at 04:26 AM
Hi,
This is very informative post.For getting auto loan If you are suffering from bad credit and want to repair your credit score then you need Credit repair services, Bad Credit Repair.For this check out our website http://www.thecreditbar.com.
Posted by: Credit Repair Services | October 14, 2009 at 10:46 PM
poor credit auto loan is a great opportunity to rebuild your credit rating. Since a car can be important for people to be able to attend work and repay their loans, traders and loan providers have established the low credit scores auto loan program to help consumers that have terrible credits avail this kind of loan option.
Posted by: bad credit auto loans | March 02, 2010 at 11:53 PM
The true 0% deals appear to have gone... they tend to have a transfer fee involved now.
Posted by: Loans | April 16, 2010 at 01:33 AM
Well, when it comes to auto loans, 0% financing is a gimmick in most cases. Usually consumers have the choice of taking either a rebate (which lowers principle) or the lower interest rate (which has long term benefits). I say take the lower principle (rebate).
Posted by: auto loans | May 14, 2010 at 10:33 PM
Sometimes we are always talking about Nike dunks,but how many times we buy them truely,now come on,link my name,and order something,thanks.
Posted by: Nike dunks | September 18, 2010 at 02:52 AM
i want to buy a car .so i want to know about loan plans suggest me some plans so that i can get that
Posted by: Car Loans | March 22, 2011 at 12:17 AM
My cialis http://www.maxipharmacy.com/ cialis levitra vs.
Posted by: cialis to buy | May 16, 2011 at 07:52 AM
cialis with melons contraindications cialis dosage online cialis dosage http://www.maxipharmacy.com/ nexium cialis buy cialis online viagra.
Posted by: cialis to buy | May 25, 2011 at 07:15 AM
pepe jeans uk is ideally suited for people,particularly for some sub-standard components of unquestionably the body. The pepe jeans
Posted by: pepe jeans | August 05, 2011 at 10:59 PM
nice to have you do all of the research for us. It makes our decision making so much easi
Posted by: mbt shoes clearance | September 17, 2011 at 11:58 PM
Thank you for this post We share the opinion on it and I really enjoy reading your article.
Posted by: Cheap Jordan | September 23, 2011 at 08:34 AM
Thanks for sharing. This website is to I too have to help. Very good.
Posted by: cheap jordan 1 | October 06, 2011 at 10:34 AM
a lot of editors have started to understand more about alternate options, they will obtained a little cameras, spend some money to hire nearby residents and individuals across the actors within the facilities
Posted by: Canada Goose Jacket | November 24, 2011 at 05:29 PM
For any folks invested in more and better resident contribution, that is a knock back, i believe.
Posted by: Belstaff Jackets | November 24, 2011 at 05:47 PM
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Posted by: Mulberry Bags sale | November 28, 2011 at 07:44 PM
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Posted by: Spyder Ski Wear | November 28, 2011 at 08:15 PM
This is a good subject to talk about. Sometimes I fav stuff like this on Redit. This article probably won’t do well with that crowd. I will be sure to submit something else though.
Posted by: Arcteryx Jackets | November 30, 2011 at 10:45 PM
Boo hoo alright, it was only three who topped themselves. Pity a few more, (particularly Mahommed Daoud) didn't take that option also.
Posted by: Arcteryx Jackets | December 05, 2011 at 11:31 PM
This is a good subject to talk about. Sometimes I fav stuff like this on Redit. This article probably won’t do well with that crowd. I will be sure to submit something else though.
http://www.northfacejackets4uk.net
http://www.northfacejackets4uk.net
http://www.northfacejackets4uk.net
http://www.northfacejackets4uk.net
Posted by: North Face UK | December 19, 2011 at 01:27 AM