Happier Holidays with a Holiday Loan that Pays YOU
By: Chad Gramling
Posted on Monday, December 8, 2014
Now that the turkey is eaten, the Black Friday lines are gone and we’re awaiting delivery of our Cyber Monday buys, let’s talk money. If you’re like many of us, you realize how fast this time of year can overwhelm your wallet. That’s the key reason we’ve designed a Holiday Loan to not only help you get through these demanding months, but also provide flexibility for finishing off last minute gifts, get-together needs, and more.
Get 1% Cash Back – up to $200
Like our Auto Loan, we’re giving members money back when they get a Holiday Loan. Also like our loan rates, if you shop around, you likely will find rates that are a bit lower despite ours holding steady right at or just below market average. But beware of super-low, almost too-good-to-be-true loan rates. Often they are used to pique your interests and overshadow other drastic changes to the loan offer. For instance, to recoup the lost money in offering a “special” rate, institutions will sometimes:
- Shorten available term lengths (to a typical range of 18-24 months in our market). This creates a higher monthly payment that could also extend the demands on your wallet into the New Year.
- Have an application or acceptance fee. Even a relatively small fee – like $25 – can change your effective rate, taking one that’s say 5.99% to as much as 7-10% before all is said and done.
Show me the money – What getting cash back means to you
Consider two hypothetical loan scenarios, one is at 3Rivers where you receive 1% cash back and the other is a typical program that’s representative of our market:
3Rivers Average Bank
Amount: $4,500 $4,500
Rate (as low as): 8.95% 5.99%
Term: 48 Months 24 Months
Monthly Payment: $111.88 $199.42
Using this average scenario, your monthly payment is more than $87 less than the alternative. And, you get cash back – $45 in this example. You could put some or all of it onto the loan principle – or you could use it for some presents for loved ones.
Or use your savings to pay off your loan faster
Since you loan payment is lower, you might also consider putting some or all of that difference onto the monthly payment to pay it off faster. For instance, if you put 50% of the difference (an extra $43.77) onto each loan payment, you’ll pay off in 33 months instead of the original 48 – PLUS, you are still saving $45.77 in monthly loan payments – PLUS you pocketed the $45 when you opened your loan! If you’re more aggressive minded about paying the loan back, you could put 100% of the difference onto monthly payments and have it paid off in 25 months.