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0% Financing

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Posted · Report post

Is like crack cocaine to me.

If I'm buying something and they're offering this, is there any reason not to take it?

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As long as you have the cash on reserve on top of your 6-9 months salary savings no.
If they know you have good credit and offer 0% they are banking on you losing your job. Its a gamble and sooner or later they will win, just as you will lose.

Personally I will do it, but plan on paying it off in 6 months max. If I cant do that then I cant afford it.

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0% financing for how many months...

if indefinite...it is like crack...otherwise it's nothing more than a hope/bet that you'll forget and not have the money at the deadline and they'll backcharge all that interest on you.

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it's usually just a way to get you to buy something you wouldn't normally buy...



because apparently it's like crack.

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I might use 1.7% to buy a used car. Haven't decided on 6-7 year deal though. I looked at the depreciation over time and would never be upside down in the vehicle and the monthly payments are stupid....i mean really stupid

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Depends on the circumstances. As long as its something you need, then its definitely the best way to go. We recently decided to buy some new furniture, and specifically picked a store that offered 0% if paid for in 18 months. Just make sure you pay it off in the allotted time, or you get stuck with a lot of interest.

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we got a new HVAC system on 0% financing/3years.

it was a great option.

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[quote name='Kitten Diver']As long as you have the cash on reserve on top of your 6-9 months salary savings no.
If they know you have good credit and offer 0% they are banking on you losing your job. Its a gamble and sooner or later they will win, just as you will lose.

Personally I will do it, but plan on paying it off in 6 months max. If I cant do that then I cant afford it.[/QUOTE]

That depends on what they are selling. Many of them look at it as a way to sell their stuff, with an added bonus if the customer doesn't get it paid in time. They are looking at the overall bottom line of the company and its ability to move the product.

They also think that it tends to make it more likely that you will be a repeat customer.

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typically financing offers like that come from a third party bank. The company you buy the product from basically buys down your rate to use as an incentive. They rarely see a nickel if you don't pay in time.

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I work on the huddle for 0% financing

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[quote name='Jase']typically financing offers like that come from a third party bank. The company you buy the product from basically buys down your rate to use as an incentive. They rarely see a nickel if you don't pay in time.[/QUOTE]

Or the company has its own inhouse bank, like Ford Motor Credit.

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[quote name='Jase']we got a new HVAC system on 0% financing/3years.

it was a great option.[/QUOTE]


so where'd you get it that you were able to finance it?

I knock on wood every summer that our a/c doesn't go out..and every year it breaks...$80 here...$130 there...I'm scared that her big death is right around the corner....it was put in around 1995.....

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[quote name='Jase']typically financing offers like that come from a third party bank. The company you buy the product from basically buys down your rate to use as an incentive. They rarely see a nickel if you don't pay in time.[/QUOTE]

Yep. The solar company I worked for offered 0% interest. We would cut deals to customers who did not use it though because it basically took 6% off our profit when they did.

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I always get 0% financing on everything... because I steal it
1 person likes this

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[quote name='jsquared']I always get 0% financing on everything... because I steal it[/QUOTE]

hamburglar?

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among other things

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[quote name='Mrs Pantherfan']so where'd you get it that you were able to finance it?

I knock on wood every summer that our a/c doesn't go out..and every year it breaks...$80 here...$130 there...I'm scared that her big death is right around the corner....it was put in around 1995.....[/QUOTE]

On Zcustom's suggestion I brought Horne Heating and Air in for an estimate and they gave us the best quote/service.

I only needed to replace the AC, but thanks to the special financing, I went ahead and invested in a new heating system as well and boosted the efficiency of the entire system. (turned out to be a good thing, they found out when replacing the furnace that it was originally wired wrong and should have caught on fire years ago.)

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nice! hopefully I won't have to call them any time soon..but I now know who to call

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Did someone say crack?

[IMG]http://img96.imageshack.us/img96/9079/d7e80tyrone2.jpg[/IMG]

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[quote name='Panthro']I might use 1.7% to buy a used car. Haven't decided on 6-7 year deal though. I looked at the depreciation over time and would never be upside down in the vehicle and the monthly payments are stupid....i mean really stupid[/QUOTE]

dude do not finance a used car for 7 years. Even at that extremely low rate that would be dumb. If the payments are stupid low for your budget then go as short term as you comfortably can.

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little known credit issue concerning 3rd parties. even though you get the 0% be aware of who the underwriter or how they classify who is loaning you the money.

meaning, lets say you get a loan and 0 but its not technically the comp you are buying from and the comp they gave you credit is categorized as a finance comp, this, could LOWER your credit score. its kinda rare but can happen.

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If you don't pay it off before the end of the "free" period, then you are hit with all the back interest! :eek:

Usually the interest is 19%=25%!!!

Also doing this will lower your credit score across the board. Way worse than if you have a loan outstanding. (That's the first thing they tell you in real estate school.) Companies that offer 0% financing don't report anything to the credit companies, just that you have an outstanding loan. This raises a red flag to underwriters. Until you either don't pay if off in the amounted time or you do pay it off in the amounted time.

I used to tell all my clients NEVER go out and buy a bunch of furniture or anything else on 0% interest for.... It will usually drop your credit score by 10++ points easily. If could mean getting a home loan and not getting a home loan.

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[quote name='sports talk']If you don't pay it off before the end of the "free" period, then you are hit with all the back interest! :eek:

Usually the interest is 19%=25%!!!

Also doing this will lower your credit score across the board. Way worse than if you have a loan outstanding. (That's the first thing they tell you in real estate school.) Companies that offer 0% financing don't report anything to the credit companies, just that you have an outstanding loan. This raises a red flag to underwriters. Until you either don't pay if off in the amounted time or you do pay it off in the amounted time.

I used to tell all my clients NEVER go out and buy a bunch of furniture or anything else on 0% interest for.... It will usually drop your credit score by 10++ points easily. If could mean getting a home loan and not getting a home loan.[/QUOTE]
My loan has already gone through underwriting and been approved in full, but I have not yet closed. I need to buy a fridge and a washer/dryer for my house...am I safe to at this point or I do need to wait until I close?

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[quote name='jsquared']among other things[/QUOTE]

Rapist?

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