Consolidating car loans?

LibertyUnites · #1 (**permalink**) 10-05-2009, 04:11 PM

I'm going to try to post this here since the Personal Loans section won't display my posts... I apologize for my question being highly specific and rather... well, stupid. When it comes to finances, I am undereducated to say the least.

I have recently become aware of a loan available to recently appointed Officers in the military through USAA ($25000 @ 4.99%) for which I am eligible.

I currently have two car loans:

(1) My truck I bought a few years back which cost $18k and I financed with a 60 month loan @ 7.74%. With interest the truck will cost me about $21800 when it's paid off here in a year or so.

(2) A car I bought for my wife earlier this year for just over $20k on a 72 month loan @ 7.29%. All told, that one will cost me over $25k with interest.

So my questions are: Is taking the lower interest rate $25k loan and using it to pay off my two current loans a good idea?

If I pay off a loan on a vehicle, would I just pay off the original dollar amount I bought the vehicle for, or am I also held responsible for interest they would have made off me?

My logic is that in taking a single, lower interest rate loan (about $470/month payments, if I'm not mistaken) and paying off two, more-expensive loans (I pay just over $700/month currently), I would save myself over $200/month.

I'm just worried that, like most things in life, this isn't as simple or easy as I am thinking it to be.

dirtroad · #2 (**permalink**) 12-15-2009, 01:07 PM

While i have some experience in consolidating loans (given my life experience, 58 years here) i regret have no knowledge regarding the military.. sorry

littleroc02us · #3 (**permalink**) 12-17-2009, 11:37 AM

So, let me get this straight, you have $47,000 in cars and trucks? Wow! I hope you make 3 times that in salary. Me personally, I can't imagine all of my income going to pay off that kind of money. When you retire someday your gonna wish that you didn't invest that money instead. Sell them and buy 2 cheaper vehicles.

Upper10% · #4 (**permalink**) 12-17-2009, 09:11 PM

Quote:

Originally Posted by LibertyUnites

I'm going to try to post this here since the Personal Loans section won't display my posts... I apologize for my question being highly specific and rather... well, stupid. When it comes to finances, I am undereducated to say the least.

I have recently become aware of a loan available to recently appointed Officers in the military through USAA ($25000 @ 4.99%) for which I am eligible.

I currently have two car loans:

(1) My truck I bought a few years back which cost $18k and I financed with a 60 month loan @ 7.74%. With interest the truck will cost me about $21800 when it's paid off here in a year or so.

(2) A car I bought for my wife earlier this year for just over $20k on a 72 month loan @ 7.29%. All told, that one will cost me over $25k with interest.

So my questions are: Is taking the lower interest rate $25k loan and using it to pay off my two current loans a good idea?

If I pay off a loan on a vehicle, would I just pay off the original dollar amount I bought the vehicle for, or am I also held responsible for interest they would have made off me?

My logic is that in taking a single, lower interest rate loan (about $470/month payments, if I'm not mistaken) and paying off two, more-expensive loans (I pay just over $700/month currently), I would save myself over $200/month.

I'm just worried that, like most things in life, this isn't as simple or easy as I am thinking it to be.

You take advantage of it within 1 year of commisioning.

Here's the skinny. For the soon to be "Occifers"[sic]...

, you can apply 4 months in advance. You will need your Certificate of Oath(or something like that) and the current rate is 2.99% with a repayment term of 60months which works out to about $450/mo. There are some requirements. Your full military pay must be auto deposited into your CHECKING accout, not savings(I asked), you must maintain overdraft on your checking, and your payments must be taken from your checking, not savings. If you fail to meet any of these, the interest rate jumps to over 18%.....That's how they get you.

dirtroad · #5 (**permalink**) 12-22-2009, 12:25 AM

car rich .. cash poor a bad place to be in this economy

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