ButterflyPrincess Posted April 17, 2012 Posted April 17, 2012 As I'm typing this, my bf is at the bank, talking to a financial advisor about getting a line of credit to help him pay off his car loan a little bit faster (he figures that because the line of credit has the lower interest rate, he can devote more of his paychecks to paying off the car's balance itself rather than the higher interest rates). I'm a little skeptical about this, I have to say- I don't know that much about line of credits and that sort of thing, but I have this feeling that this move really won't do anything to save him money (I'm actually kind of concerned that it is just using debt to pay off debt, therefore causing more trouble for him). I'm hoping whatever happens today, he can find some sort of a solution to his financial situation- it's been really stressing him lately (In the past, he's been pretty umm, frivolous with his money, and lately he's been working hard to try and fix the situation). Kind of worries me- I hate seeing him stressed over finances like this
thatone Posted April 17, 2012 Posted April 17, 2012 if the rate is lower it's a good idea. bank loans for cars are often lower in interest rate than car dealer loans, so people refinancing their cars these days is perfectly normal. as with anything, just read the fine print.
dasein Posted April 17, 2012 Posted April 17, 2012 Sounds reasonable, in fact, if it's a home equity line you're talking about, it's a great idea because the interest on almost all those is tax deductible and lower than a car rate generally. Be wary of FEES, that's how they get you, and examine the TILA disclosure as to real APR very carefully. Make sure the money he's getting is significantly cheaper compared to what he already has. Also be wary of getting "cashinhand" disease and running out and splurging once the line is closed. Many a dude or dudette has represented a line of credit as "a way to pay something else down" and actually has a whole nother purchase in mind (not accusing him of that just saying). People lose their houses that way.
Author ButterflyPrincess Posted April 18, 2012 Author Posted April 18, 2012 So BF went to the bank today, and the adviser advised him that it's better if he doesn't take out a line of credit at all- instead, she told him that he is poised to tackle higher monthly payments against the car and the interest on the car without having to dip into extra loan funding. Plus, she told him that he could save extra money by switching to a different debit account with a lower interest rate (one of those money-back ones, which isn't to bad for him because he uses debit instead of cash most of the time anyways- he pays extra for unlimited card usage. I'd never be able to do it, but he seems to know what he's doing so I leave him to it) I'm relieved. Since we've been dating he's been trying to tighten his belt when it comes to money matters, and it seems like it's starting to pay off
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