Interest Rates Credit Union (vs Bank?)

[Arimamassive]

Been looking to purchase a RORO vehicle for around $100,000
I have like ~50% the cost of the vehicle. So what i want is pretty much a $50,000 loan.

So i went to the CU (eastern) today and was told that the payments will be something like ~$3,200 for 4 years....

That works out to be a total of $153,600 after 4 years...

-----------------------------------

I was honestly suprised, as on their website it states that the interest rate is 1.25% on the Reducing balance of RORO vehicles 6 years old. I did some maths and some formatting in excel.

*** Using monthly payments of $2000, my format was simple = Loan Balance Remaining+(Loan Balance Rem. x 1.25%) - 2000.
*** The first month = 50000 (50000 x 0.0125) - 2000
*** The following months i would use the total i got as the Balance Remaining and keep going month by month
*** Using these $2000 payments after 30 months i only owed $322.


So all in all it was only taking 31 months to pay the amount owed if using a basic $2000 a month.
I worked out all of these things before going in for my appointment today and was taken by suprise when the officer told me that my payments will be around $3,200 for 4 YEARS!

Link to the Vehicle loans on the website http://www.easterncutt.com/index.php/loans/consumer-loans/vehicle-loan.html

You guys can click on the link above and verify my format and if i did anything wrong calculations-wise.

I'd just like to get a rough idea of what other people monthly payments are and for how long they have to pay it, because i remember when my old man went for a RORO Ad wagon vehicle loan 9 years ago, he payed it off within 3 years(5 max) and he only ended up paying about 10,000 extra than the amount borrowed(48,000).

Help a brother in the struggle understand whats going on here please...
I'm tempted to just withdraw my money and save it at home to be honest...

[j.o.e]

Something is wrong with that calculation , I feel they financed the whole car and add first year insurance. That's not a loan for $50k.

[Arimamassive]

I was wondering if it was due to me being a first time borrower...
But i thought my money (as little as it may be) would at least do some barking/biting for me to be honest.

Maybe i should call her tomorrow again to clarify this, because this has dampened my spirits a whole lot. I honestly thought the payments would've been around $1,700.

Even when i told her than maybe its best i take something used locally/2nd hand for around $85,000 totalling(35k loan), the payments she told me i would have to make was like $2,200-$2,400 per month for 3 years to booth. (Which works out to be a total of 79,200 @ 2,200 and 86,000 @ 2,400 after the alloted time)

She then said it's best i purchase a brand new vehicle(Showroom) that comes with less stress for around 150,000 and i would end up paying the same $2,200 a month for 7 years instead. This monthly payment was the only one she gave me that matched my calculations using their 7% interest rate on New vehicles.

Hmmmm...

[clintus]

They calculated the loan at the full cost of vehicle not what u have. Basically that money(yours) would have to be deposited into an account and to build up ur shares balamce in order to qualify for the loan. So u were in fact borrowing the full amount for vehicle

[gt4tified]

In any event, when you pay the Credit Union their interest, as a shareholder you are really paying yourself. Unless you are a shareholder at the respective commercial bank, you putting money in someone else pocket.
That's my logic anyway...good luck with your loan.

[bigval]

Yea OP, they using your 50 as security and the loan is actually100

So basically they charging you to lend you your money (50) plus their 50

But thas d only way you will get that loan

My opinion, is to bite d bullet and save the rest then buy vehicle. I really hate how they give those loans personally, cus it does be a hassle paying that back for an extended period.
Took a loan a while back, had a couple of late payments and was charged alot of interest due to that. After that is save and then spend for me, unless its like a house or sum I really cant save for

[rayrayray]

That's not for a 50k loan buddy , what others are saying is correct. Now go get installments for a 50k loan ( time variable ) with your 50k downpayment. U may have to use out of that to put towards shares at the credit union.

[stev]

as said before, that's not a loan for $50,000 eastern giving u. don't be afraid to ask any questions (no matter how simple) when talking to their loan officers. they will gladly put your $50,000 in a share account and then buy the vehicle for u.....after the 4 years when u pay out for the car, that $50,000 will still be available in ur shares.

which branch of eastern u went to if u dont mind i asking?

[Arimamassive]

They calculated the loan at the full cost of vehicle not what u have. Basically that money(yours) would have to be deposited into an account and to build up ur shares balamce in order to qualify for the loan. So u were in fact borrowing the full amount for vehicle

Well i have the cash in the CU under shares...i have the account about 10 years now.
I tend to do most of my business cash, so the account tends to be a bit stagnant from time to time though, but i do have the 50% on my shares. Really and truly you only need 30%($33,000 for 6yr old cars RORO) but i kinda thought the 50% would make things easier...

Yea OP, they using your 50 as security and the loan is actually100

So basically they charging you to lend you your money (50) plus their 50

But thas d only way you will get that loan

My opinion, is to bite d bullet and save the rest then buy vehicle. I really hate how they give those loans personally, cus it does be a hassle paying that back for an extended period.
Took a loan a while back, had a couple of late payments and was charged alot of interest due to that. After that is save and then spend for me, unless its like a house or sum I really cant save for

So lets say i finish pay off for it(150K) after the 4 years, i'm guessing my 50k that i originally had will still be in CU since they're using it as security eh...

Doesnt change the fact that i'm having to pay a whole 150k in payments for a 50k loan. So i pretty much pumped 200k into the CU when all that was needed for me to handle my biz was 100k(inclusive of whats on my shares)...

I dont understand the logic in using my money as security when it doesnt even amount to the total cost of the vehicle too(why not use the vehicle itself?)...it's probably a way of them ensuring that you remain a customer so they can keep using your money in a smart way i guess.

[Arimamassive]

That's not for a 50k loan buddy , what others are saying is correct. Now go get installments for a 50k loan ( time variable ) with your 50k downpayment. U may have to use out of that to put towards shares at the credit union.

as said before, that's not a loan for $50,000 eastern giving u. don't be afraid to ask any questions (no matter how simple) when talking to their loan officers. they will gladly put your $50,000 in a share account and then buy the vehicle for u.....after the 4 years when u pay out for the car, that $50,000 will still be available in ur shares.

which branch of eastern u went to if u dont mind i asking?

Its the Arima Branch.

I have the cash on shares already, its been this amount for about a year.
I still dont get why they're freezing it. All i want is 50k...use the car as security or collateral
Let me work on getting the 50k and if i want to put anything on my shares i will on my own time.

I'll have to call her tomorrow and lace with her a bit...

[5onDfloor]

The way CU loans are set up, they put your money down as shares and finance the car 100%. In your example by the time you finish pay for the car you would still have the shares plus the car (depreciated value)as oppose to just the car and no shares. ls really to encourage saving.