Interesting Loan Offer

by Rocket Finance

I just received this notice in the mail last week regarding our car loan payment. We are pretty tight for cash right now so I am tempted to accept the offer, but I’m not completely convinced that the deal is such a good idea in the long run. Here is the pitch:

Good news! There’s one bill you won’t have to pay this Holiday Season!

As a way of saying “thanks” for your prompt loan payment, ______ Bank is offering you the opprtunity to skip either your December 2007 or January 2008 installment loan payment — whichever you prefer. We hope that you find this “Skip-A-Payment ” opportunity a welcome relief and that it gives you some extra money to enjoy.

The letter goes on to explain that the payment will be added on to the end of the loan term. So they are not forgiving one payment, but rather delaying it. My payment amount is $306. Here some options:

1) Ignore the offer and continue to make payments like usual.

2) Skip one payment and pay double on the next month.

3) Skip the payment, and put the $306 in an interest bearing account. (We have four years left on the term of the loan.)

4) Sell the car and pay off the loan (difficult to do since we owe more than the Bluebook price).

5) Skip the payment and use the $306 to purchase a nice gift for my wife (she deserves it).

What do you suggest?

Chase Freedom<sup>SM</sup> Cash Visa® Card

  1. 2 Responses to “Interesting Loan Offer”

  2. By plonkee on Nov 26, 2007 | Reply

    Quite often when they put on these offers, there is an extra fee and they charge interest whilst you miss the payment. Read the small print carefully if you decide to take them up on the offer, they aren’t trying to be nice to you, they’re trying to make some money.

  3. By rocketc on Nov 26, 2007 | Reply

    I did not see any extra fees, but I am sure that they will charge interest. My rate is 8.25% and the time remaining is 4 years.

    I’m not sure if I am figuring this right, but the amount that I actually pay back might be as high as $420. Unless I accelerate my loan repayment.

    I am leaning toward missing the December payment and then paying double in January.

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