Balloon payment finance plan??
- Thread starter Joseph
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TRD04RUNNER
New member
Joseph said:
yea ,you pay a lower month payment BUT at the end of your contract you would have to pay the balance in FULL! and you cant get out of it like you can a lease. i would lease it or finance it. balloon payment is not the way to go!!!
TechWrench
Senior Member
Joseph said:
Yes, your initial payments are lower, but the last payment "balloon" is a biggie, the remaining balance you still owe. So you have to make arrangments to refinance another loan for the final payment, unless you can make the it on your own.
Basically up until the balloon payment you are just paying interest and depreciation.
If you are having problems with the extra money per month where are you going to find the balloon payment?
Quote from article on bankrate.com
The balloon bamboozle
Similarly, there's nothing illegal or even deceptive about dealers offering loan periods extending out six or seven years. After all, many cars last longer than they used to, and longer loan terms mean your monthly payments are lower than they otherwise would be.
Still, there's a danger. "These loans take forever to pay off," says Mark Perleberg, lead automotive expert with NADAGuides.com. You're likely to continually owe more on your car than it's worth, because your car is depreciating faster than you're paying it off. If you're considering a long loan period, you may want to consider a less expensive car better suited to your budget.
Similarly, some dealers will encourage you to purchase a car for unrealistically low monthly payments now, but with a balloon (inflated or much larger) payment at the end of the loan period. In a few cases, this can be a legitimate way to finance a car. For instance, you may just have graduated and can realistically assume that your income will rise by the time the balloon payment comes due.
Be wary, however. "Make sure you know what you're doing," says Wiesenfelder. "If you're only paying $198 a month on a $35,000 car, there's a reason. Eventually, you have to pay the principal."
How can you avoid all of these come-ons? Educate yourself. "Many dealers are good and honest, but there are some that you need to be more careful of," says Reed of Capital One. "Know what you want to buy and know your alternatives to dealer financing. Then, be careful of the dealer selling you things you
If you are having problems with the extra money per month where are you going to find the balloon payment?
Quote from article on bankrate.com
The balloon bamboozle
Similarly, there's nothing illegal or even deceptive about dealers offering loan periods extending out six or seven years. After all, many cars last longer than they used to, and longer loan terms mean your monthly payments are lower than they otherwise would be.
Still, there's a danger. "These loans take forever to pay off," says Mark Perleberg, lead automotive expert with NADAGuides.com. You're likely to continually owe more on your car than it's worth, because your car is depreciating faster than you're paying it off. If you're considering a long loan period, you may want to consider a less expensive car better suited to your budget.
Similarly, some dealers will encourage you to purchase a car for unrealistically low monthly payments now, but with a balloon (inflated or much larger) payment at the end of the loan period. In a few cases, this can be a legitimate way to finance a car. For instance, you may just have graduated and can realistically assume that your income will rise by the time the balloon payment comes due.
Be wary, however. "Make sure you know what you're doing," says Wiesenfelder. "If you're only paying $198 a month on a $35,000 car, there's a reason. Eventually, you have to pay the principal."
How can you avoid all of these come-ons? Educate yourself. "Many dealers are good and honest, but there are some that you need to be more careful of," says Reed of Capital One. "Know what you want to buy and know your alternatives to dealer financing. Then, be careful of the dealer selling you things you
bulldog-yota
New member
rathe lease if you really want to get it and can't afford the full payment, but best is just to get the proper financing. at least with a lease you can return it at the end if you dont want or afford it at that point. witha ballon payment you are stuck with the biggie at the end. see how lease compares to balloon and what principal is outstandding at the end.
as with any car purchase first get the best CASH price of the vechile before even thinking about talking finance.
as with any car purchase first get the best CASH price of the vechile before even thinking about talking finance.
