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  • #16
    Originally posted by Zaphod View Post

    You can get 0% auto loans. On depreciating assets, even used you can get near 0%. This is actually great since you're never paying for the depreciation up front nor sunk a bunch of money into something before its actually provided any value. It gets stolen, wrecked, etc...or you change, no big loss.

    Whether or not something is good is solely based on price, if its free to negative, I'll take it if there is something else to do with my money, if its high enough to matter, other options.
    Can you let me know where I can get a 0% loan?

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    • #17
      Originally posted by zlandar View Post
      $10k is a small amount. I would just pay it off. Paying off the mortgage would be the better financial choice but I would rather get rid of the loan.

      On a $145k mortgage balance at 4% it may not be worth refinancing depending on the refi cost. You could prepay the loan balance down instead. With the standard deduction $24k for married couples most Americans are not getting any Federal deduction on their mortgage.
      Considering we're going to sell our home in 7 yrs., I really can't see the point in refinancing at this point. Current home value is ~360k and plan is to buy in the 150-250k range(2BDRM condo in 55 over AZ community) w/little or no mortgage.

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      • #18
        Our auto loan is 0.99%. Definitely not paying that off any faster.

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        • #19
          Originally posted by afr View Post

          Can you let me know where I can get a 0% loan?
          https://cars.usnews.com/cars-trucks/...free-car-deals

          These were the "12 best" so maybe there are even more

          A pretty exhaustive list

          https://www.findthebestcarprice.com/...ent-financing/

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          • #20
            1. I would keep a decent emergency fund. ( 3 months expenses)
            2. I would pay off both the car and the house (zero risk, guaranteed return, emotionally wonderful IMO)
            3. If you want to increase return by adding risk ( which is what you would do by investing instead of paying off debt) then decrease bond allocation. ( debt pay-off can almost be considered a negative bond, so you can feel better with no / less mortgage and a higher stock allocation)

            This is also simple, pleasing, and cuts out the middleman ( banks/lenders) who are predators by nature (fine print is real).

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            • #21
              I assume your Efund is exactly where it should be.
              Paying a debt is not an emergency.
              • Pay it off out of your spending. Keep it in your checking account until you write the check. An efund is a cash flow reserve. If you are going to replenish it, then 2 weeks is the outside limit.

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              • #22
                I would get in the habit of trying to buy auto with cash, because it is a depreciating asset and if you cant afford it you should buy something less expensive. Other than your mortgage/rent , it tends to be one of the larger ongoing expenses in life. Getting a grip on it early saves a lot of money down the road.

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                • #23
                  One way of getting a 0% auto loan on your car since you can't get a 0% auto loan on a used car:

                  Open a no balance transfer fee 0% credit card for 18 months and transfer the loan to the card, $10K. Downside is you need to pay it off within 18 months to avoid interest or transfer the balance to another 0% card towards the end of the term. $10K/18 months = $560/month. Over 36 months it's half of that. So consider your cash flow, but your EF provides a nice backstop.

                  Alternatively, you have a lot of equity in your home. You can open up a no fee HELOC against the house (prime minus 50 basis points is usually doable = 2.75%) if you don't already have one, pay off the vehicle with your "emergency funds" - this will deplete your EF but if you do run into the unlikely emergency, the HELOC can serve as an emergency reserve until you replenish the $10K back into your EF. In this scenario you also pay off the auto balance at 0%. Once you pay off the $10K auto loan, depending on your cash flow you can transfer part of your mortgage to the HELOC as rates are expected to stay here for a few years - essentially a partial refinance at 2.75% with 0 closing costs. Just make sure the cash flow of the extra HELOC payments are manageable for you. After 2008 I transferred my entire remaining 5.25% mortgage to a $500K heloc at a much lower interest rate and subsequently paid it of with 3 years this way, on a home built in 2006.

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                  • #24
                    Originally posted by EntrepreneurMD View Post
                    One way of getting a 0% auto loan on your car since you can't get a 0% auto loan on a used car:

                    Open a no balance transfer fee 0% credit card for 18 months and transfer the loan to the card, $10K. Downside is you need to pay it off within 18 months to avoid interest or transfer the balance to another 0% card towards the end of the term. $10K/18 months = $560/month. Over 36 months it's half of that. So consider your cash flow, but your EF provides a nice backstop.

                    Alternatively, you have a lot of equity in your home. You can open up a no fee HELOC against the house (prime minus 50 basis points is usually doable = 2.75%) if you don't already have one, pay off the vehicle with your "emergency funds" - this will deplete your EF but if you do run into the unlikely emergency, the HELOC can serve as an emergency reserve until you replenish the $10K back into your EF. In this scenario you also pay off the auto balance at 0%. Once you pay off the $10K auto loan, depending on your cash flow you can transfer part of your mortgage to the HELOC as rates are expected to stay here for a few years - essentially a partial refinance at 2.75% with 0 closing costs. Just make sure the cash flow of the extra HELOC payments are manageable for you. After 2008 I transferred my entire remaining 5.25% mortgage to a $500K heloc at a much lower interest rate and subsequently paid it of with 3 years this way, on a home built in 2006.
                    I did neglect to mention that the car we purchased was a 2017 Honda Accord with 12k on the odometer.

                    Comment


                    • #25
                      Originally posted by afr View Post
                      We currently have $10,100 remaining on an auto loan of $13,[email protected]% originating on 2/2/2020. Our only other debt is our home mortgage($145k left on a 233k 30 yr [email protected]%). Our home is currently worth around 350k and we plan to move in 7 yrs. Our online savings is at 0.6% interest and was curious if it'd be wise to take from that emergency account(45k) to pay off the auto loan or not.
                      I would, just so I didn't have to think about it. I have other things to worry about. Not work the interest potential (for me.)

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                      • #26
                        Normally, I would recommend not paying off the debt if its low fixed rate, but this is literally 10k - chump change. I would just pay it off.

                        If it was 50k or something, then maybe a different story.

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                        • #27
                          Originally posted by afr View Post

                          Can you let me know where I can get a 0% loan?
                          Just got a used infinity for 0%. Had the cash, but now financed

                          Comment


                          • #28
                            Originally posted by EntrepreneurMD View Post
                            One way of getting a 0% auto loan on your car since you can't get a 0% auto loan on a used car:

                            Open a no balance transfer fee 0% credit card for 18 months and transfer the loan to the card, $10K. Downside is you need to pay it off within 18 months to avoid interest or transfer the balance to another 0% card towards the end of the term. $10K/18 months = $560/month. Over 36 months it's half of that. So consider your cash flow, but your EF provides a nice backstop.

                            Alternatively, you have a lot of equity in your home. You can open up a no fee HELOC against the house (prime minus 50 basis points is usually doable = 2.75%) if you don't already have one, pay off the vehicle with your "emergency funds" - this will deplete your EF but if you do run into the unlikely emergency, the HELOC can serve as an emergency reserve until you replenish the $10K back into your EF. In this scenario you also pay off the auto balance at 0%. Once you pay off the $10K auto loan, depending on your cash flow you can transfer part of your mortgage to the HELOC as rates are expected to stay here for a few years - essentially a partial refinance at 2.75% with 0 closing costs. Just make sure the cash flow of the extra HELOC payments are manageable for you. After 2008 I transferred my entire remaining 5.25% mortgage to a $500K heloc at a much lower interest rate and subsequently paid it of with 3 years this way, on a home built in 2006.
                            I've done this many times before for big purchases (such as when we got solar on our house). The only kicker is you usually have to pay a one time transfer fee to get the balance on the card. Usually it's 3%. So, paying it off with the 45k e fund is probably the better bet if you're worried about avoiding interest.

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                            • #29
                              Originally posted by hightower View Post

                              I've done this many times before for big purchases (such as when we got solar on our house). The only kicker is you usually have to pay a one time transfer fee to get the balance on the card. Usually it's 3%. So, paying it off with the 45k e fund is probably the better bet if you're worried about avoiding interest.
                              I have never paid a balance transfer fee and have been doing this for about 2 decades, and I would certainly not pay a 2% loan with a 0% card with a 3% transfer fee. I do understand though no balance transfer fee cards are harder to find these days.

                              Comment


                              • #30
                                Originally posted by EntrepreneurMD View Post

                                I have never paid a balance transfer fee and have been doing this for about 2 decades, and I would certainly not pay a 2% loan with a 0% card with a 3% transfer fee. I do understand though no balance transfer fee cards are harder to find these days.
                                The only card I've found that offers balance xfer with 0% interest is Chase Slate. Don't know of any others.

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