Bank wants to lend me 50K
Take a 50,000 loan, at zero interest for 18 months, with a 1.99% upfront fee. So I sign for $50,000, get a check for $49,000 and change and have 18 months to pay back $50,000 with no interest. I'm not sure how they can call it a loan as I thought a loan had to have interest attached to it. It's a line of credit that I can tap into. Seems like a no brainer to me.
Quote: billryanGot this offer from my bank.
Take a 50,000 loan, at zero interest for 18 months, with a 1.99% upfront fee. So I sign for $50,000, get a check for $49,000 and change and have 18 months to pay back $50,000 with no interest. I'm not sure how they can call it a loan as I thought a loan had to have interest attached to it. It's a line of credit that I can tap into. Seems like a no brainer to me.
It does have interest attached you will be paying it up front its 1.99%
Here is the kicker- as long as I maintain an account in good standing there is no monthly minimum payment.
These are the type of offers they gave out in 2005. The last few years banks haven't been lending much. Now this unsolicited offering.
in traditional interest, it all in the end will mean the same you paid X to borrow X for X long.
Quote: rainmanMy point is you are paying for the loan you can call it a upfront fee you could pay for it
in traditional interest, it all in the end will mean the same you paid X to borrow X for X long.
Never said I wasn't paying for the loan. It's just the cost of the loan is ridiculously cheap. If banks start making money so cheap, we will have a repeat of the days when taxi drivers were buying second and third houses and bartenders were buying pre-construction condos in Florida because land always goes up in value.
In any case, no matter how you slice it, it is not a 1.99 % interest rate.
Quote: MaxPenThat's the whole reason why I asked "why post something like this here". Billryan answered his own question with his question. 0% interest rate for first 18 months. They either had a benchmark or fixed rate specified in the offer after the first 18 months. That is why it can be called a loan. He left out details to lure someone into his web.
Wrong again. It's an 18 month loan. Payment in full due then, this isn't a teaser rate that goes up after 18 months. If not paid in full, it's a delinquent loan.
Quote: billryanWrong again. It's an 18 month loan. Payment in full due then, this isn't a teaser rate that goes up after 18 months. If not paid in full, it's a delinquent loan.
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Quote: billryanWrong again. It's an 18 month loan. Payment in full due then, this isn't a teaser rate that goes up after 18 months. If not paid in full, it's a delinquent loan.
If thats true, thats a highly unusual offer, but I doubt those are the actual terms.
I get these offers in the mail literally every day. They way they work is that they charge you the initial fee for the loan, followed by 0% payments for X months. The GOTCHA is that if you dont pay off the full principal of the loan in those promotional months, they add the accrued interested at a stupidly high rate for those no interest months, and add that to the principle of the loan.
You always see interest free loans at furniture stores as long as the bill is paid off at the end of the agreement. Of course most people don't have the cash when the money is due so now the high interest gets levied on monthly payments.
You probably should write a book on how to hide wealth legally and live off the backs of others paying your insurance. All the while filling your days calling other idiots and racists. You are truly living the libera version of the American dream!
Quote: billryanNo, that's not interest. Interest would be charged monthly on the outstanding balance and the monthly interest would vary. The quicker I paid it back, the less interest I would pay. On these loans, paying it back in one month costs the same as paying it back in 18 months. If the annual interest rate was 1.99, and I paid it upfront, it would be closer to $2,000 than 1,000.
Not necessarily. Not all loans have monthly payments and principle recalculations. I have a feeling this is being bogged down in semantics.
For all intents and purposes, you borrowed $49,005 and agreed to pay back the principle with $995 interest in 18 months, even if it is one lump sum payment at the end of the 18 months, and no "refund" for an early payoff. That's about 2.03% interest over 18 months, or about 1.35% per year if you paid it off that way.
Now, back to what I think was the original question: can you make more than $995 profit from the money in 18 months without losing the $49,905 first?
Quote: ThatDonGuyNot necessarily. Not all loans have monthly payments and principle recalculations. I have a feeling this is being bogged down in semantics.
For all intents and purposes, you borrowed $49,005 and agreed to pay back the principle with $995 interest in 18 months, even if it is one lump sum payment at the end of the 18 months, and no "refund" for an early payoff. That's about 2.03% interest over 18 months, or about 1.35% per year if you paid it off that way.
Now, back to what I think was the original question: can you make more than $995 profit from the money in 18 months without losing the $49,905 first?
Yesterday's Vegas Journal had a company offering six month cds for 4.65% FDIC insured, so the answer would yes. Granted, that's a teaser rate,but such offers are out there.
Quote: billryanGot this offer from my bank.
Take a 50,000 loan, at zero interest for 18 months, with a 1.99% upfront fee. So I sign for $50,000, get a check for $49,000 and change and have 18 months to pay back $50,000 with no interest. I'm not sure how they can call it a loan as I thought a loan had to have interest attached to it. It's a line of credit that I can tap into. Seems like a no brainer to me.
Loans do not have to have interest attached. I see two issues here and have worked in lending so I have seen much:
1. You may or may not be approved for this. I don't care what the letter says, at $50K there will be some kind of underwriting to it. When they send out these letters they do a quick credit pull. When they get your application they will need your income and some other things that may or may not let you be approved. This assumes that this is not some kind of credit card offer on a card you already have.
2. As others said, look at the fine print. Interest may start at 18 months or may accrue and be all due at that point. I had a dental loan like that, accrued at 18% which was forgiven if you paid it in 18 months. Otherwise it all got added in month 19. So be GD sure you can pay it or flip it in month 17!
Could put it in a utility fund, some yield 3-4% a year in dividends, plus chance at appreciation.
BE CAREFUL!
Quote: billryanYesterday's Vegas Journal had a company offering six month cds for 4.65% FDIC insured, so the answer would yes. Granted, that's a teaser rate,but such offers are out there.
My guess is you can't pull the funds out of the CD at the 6 month mark, so this isn't really a 6 month CD.
If the CD is liquid in 6 months, please post the financial institution's name offering the terms, I have some $$ to put to work.
The company is Sun City Financial, website www.suncitiesfinancialgroup.com.
They are a consolidator , and will hook you up with an FDIC bank. $15,000 new money required for the advertised 4.65 promotion.
Check the website for details and restrictions.
Quote: billryanNot really. My will instructs my executor to pay my lawful debts.
No offense, but why the hell would you do that?
1.) Your debts die with you.
2.) If no co-signer, then there is no legal requirement that anyone pay them, which is why:
3.) Lenders are aware of that as a risk of making a loan and factor that into the rate.
Quote: Mission146No offense, but why the hell would you do that?
1.) Your debts die with you.
Maybe what you owe to your bookie or shylock, but an estate must pay its debts when it is liquidated. Cash, gold, etc they will never know about, but money in the bank and real property you are going to have to show no outstanding debts.
Quote: AZDuffmanMaybe what you owe to your bookie or shylock, but an estate must pay its debts when it is liquidated. Cash, gold, etc they will never know about, but money in the bank and real property you are going to have to show no outstanding debts.
What about stuff like credit cards?
It certainly used to be that my Mastercard and Visa credit card providers routinely wrote off any debt on death. But now, I believe they request payment from any estate. But they don't/can't push hard if there in no value left in the estate.Quote: Mission146What about stuff like credit cards?
That is an interesting offer and I think posting about it was reasonable. There are a few ways to have a decent chance of turning a profit on that.Quote: billryanGot this offer from my bank.
Take a 50,000 loan, at zero interest for 18 months, with a 1.99% upfront fee. So I sign for $50,000, get a check for $49,000 and change and have 18 months to pay back $50,000 with no interest. I'm not sure how they can call it a loan as I thought a loan had to have interest attached to it. It's a line of credit that I can tap into. Seems like a no brainer to me.
Note that they are very likely to want to up-sell you somewhere along the way. They might also make it unusually hard to close the debt. One way is to have you agree to make massively expensive repayment if you miss the tightly defined payment deadline, thus rolling the cheap debt into a crippling one.
I took interest free credit on a vcr purchase once. They made it super easy to forget to make the last payment and actually pretty tricky to meet the payment.
Quote: Mission146What about stuff like credit cards?
Everything. Your estate is "you" after you die. I assume you remember I run into this stuff in my job though it is not my job, so what I know is more than average but less than attorney. That being said, when someone dies, it will probably go like this.
The Executor will show up to the Estates department at the county courthouse. In my PA county this is called "Orphans Court" or "Wills and Estates." If an intestate death then probably just next of kin. When my dad was near death I showed up early in one of those, "this is the job you trained for!" moments to make it easier on the rest of the family. When I am working various courthouses I see people come in daily to get "sworn in" as Executor, and in Allegheny County (Pittsburgh) they do make you raise your hand and swear in.
As Executor, you have to settle up all debts and claims. You likewise claim all debts owed. Not to forget paying any owed taxes. If you just clear out the bank account and sell the house, it is possible the credit card company will have a claim against YOU for doing this. When it is all said and done, you go back to the Orphan's Court and show all claims have been settled. They give the OK, then you can distribute as the will states, or if intestate follow the directive per the law. One day it is all finished and over with, everything out of the name of the Estate of X and life goes on.
Now, say you have an uncle who is a deadbeat and owes money all over the place. He dies and leaves a financial mess. In that case, you could probably clean out the house and just let the system do its work, stiffing the creditors. In that case they will eventually write it all off.
Quote: OnceDearIt certainly used to be that my Mastercard and Visa credit card providers routinely wrote off any debt on death. But now, I believe they request payment from any estate. But they don't/can't push hard if there in no value left in the estate.
This was my job with citibank once upon a time: asset recovery on unsecured credit card debt (visa) upon death or bankruptcy. AZD is correct and accurate. Sometimes we recovered the charged value, sometimes negotiated a settlement percentage of available assets, sometimes wrote it off. There were very strict protocols in both cases, and a lot of it was talking to law firms. Accounts were designated Asset or No-Asset and handled differently.
It was an interesting, sad job. Each deceased file included a death certificate, which made for interesting reading at times. It also included a list of assets and progress on turning them into cash. Very Big Brothrr, all of it.
