Ranting on my auto loan
July 31, 2008
Not loans are created equal, and that is the tough truth I learned today. Just to share with you, I got a lump sum from the company I work for to be used to buy a car. As I canvass for the car that suits my need, I centered on one that is fuel efficient and would not cost me a lot – a subcompact. The car costs about $12,500 here in our country, and the lump sum I got is about $10,000. I was initially tempted to put the $10,000 in stocks, but I will not risk my money versus the declining trend in stocks. Oil could have been an opportunity, but I am a bit new with commodities. (But that is another story!)
Anyways, so what I did was get an auto loan to cover for the shortage and plan to do pay by lump sum in the hope of having my loan restructured, either shortening the loan term from four years to three years or reducing the monthly amortization dramatically. But in our country, such scheme only applies for housing loans. What happened then to me was that my lump sum was treated as advance payment for the next two years. Too bad I did not clear it with the loan officer. At any rate, I am now free to pay the loan in 24 months and by the time I resume payment, the monthly amortization will be smaller against my monthly income. Now that’s a good thing!
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