Great Loan Rate!!
Found on this forum but had to hunt around. Wings Credit Union has a fantastic rate for those looking to buy for the spring. 2.99% up to 6 year term. I calculated I would save $2400.00 over that ter...
Forum Discussion
So many of these posts are Black and White, Right or Wrong.
Good grief! And where did some of you learn your math?
If you get a loan at well below the rate of inflation that is a good deal. For one simple reason: you are paying the loan back with dollars that are worth less in real terms than when you took the loan out.
Additionally if you do have the $25,000 dollars in cash to spend on a RV then you are much better off putting that money in a good interest bearing account lets say...5% and financing the RV at a low 1.99% This means you are Making a net increase of 3%....Your loan is essentially free. So much for paying cash.
Does the term no-brainer come to mind???
However! if you get a 0% deal from a dealer you are still paying interest..it is built in to the sale price and is paid to the finance company. You are not winning you don't really know what interest rate you are paying.
Now sometimes there are good reasons to carry no debt and pay cash. But paying cash for something is one thing...making a decision to be debt free is another. They are not necessarily the same thing.
If the choice is between never-ending high interest debt (like some credit cards) vs paying cash for everyday items this is a totally different scenario.
Not all debt is bad. Always paying cash is not always the smartest financial decision. You have to look at the whole picture.
Affordability ie. can you comfortably pay back a loan and stay within a reasonable debt to income ratio should be one of the driving considerations of whether you buy anything.
c'mon folks a little nuance is needed here.
Good grief! And where did some of you learn your math?
If you get a loan at well below the rate of inflation that is a good deal. For one simple reason: you are paying the loan back with dollars that are worth less in real terms than when you took the loan out.
Additionally if you do have the $25,000 dollars in cash to spend on a RV then you are much better off putting that money in a good interest bearing account lets say...5% and financing the RV at a low 1.99% This means you are Making a net increase of 3%....Your loan is essentially free. So much for paying cash.
Does the term no-brainer come to mind???
However! if you get a 0% deal from a dealer you are still paying interest..it is built in to the sale price and is paid to the finance company. You are not winning you don't really know what interest rate you are paying.
Now sometimes there are good reasons to carry no debt and pay cash. But paying cash for something is one thing...making a decision to be debt free is another. They are not necessarily the same thing.
If the choice is between never-ending high interest debt (like some credit cards) vs paying cash for everyday items this is a totally different scenario.
Not all debt is bad. Always paying cash is not always the smartest financial decision. You have to look at the whole picture.
Affordability ie. can you comfortably pay back a loan and stay within a reasonable debt to income ratio should be one of the driving considerations of whether you buy anything.
c'mon folks a little nuance is needed here.
