I am researching different options for a new van for my family and am wondering if its a good or bad idea and what is best choice overall? Lease, bank loan? etc (any secrets out there maybe?)
2006-06-13 12:08:03 · 5 answers · asked by A G 2 in Cars & Transportation ➔ Buying & Selling
Ok I think I get the jist of it....however...say after 3 years....the warranty is up, tires are worn and things tend to start breaking down costing you often as much as large payments...or am I out to lunch with that perspective ? Leasing seems to serve the self-employed better however the payments are much less than a loan allowing you to get into a better vehicle than normal....We need a short term break to catch up a bit but also....Which method would have the least impact on credit/debt ratio?
2006-06-13 12:25:13 · update #1
A balloon Payment is simple.. When you are signing the paperwork at the dealership, he will give you a monthly payment that you will pay for about 3 years. After that you are responsible for the remaining amount of the loan. This is the largest payment at the end thats why they call it a balloon payment.. Instead of paying the last amount in full you have the option to refinance that remaining balance. I hope that this helps!
2006-06-13 12:14:19 · answer #1 · answered by p2000 1 · 2⤊ 0⤋
Well unless you got a steady stream of cash coming in without any tiny itsy bitsy chance of it coming to an ending Ballon Financing isnt that great. You pay and pay and pay, then all of a sudden (and usually when the cash is short in hand) does it come due and you have to sock out the entire balance all at once. One lump sum. You would be much better off having something more consistant. Go to a local banking institution or your credit union and speak to a personal banker for advice on what works best for you according to your income means.
The problem with leasing is your only borrowing the car, and never will own it until you buy it after making a boat load of payments. That is spinning wheels. That is only good if you are writing off the car to a business expense.
If you do balloon financing, we will all be watching for your ballooning bum to be floating away in the sky with no van giving you gravity holding you down. good luck.
2006-06-13 19:15:56 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Balloon financing means making smaller monthly payments (usually just to cover the accrued interest) then you make a large (or "Balloon") payment when the loan matures.
The alternative is paying more every month but no large payment at the end.
2006-06-13 19:14:54 · answer #3 · answered by kjgartman 3 · 0⤊ 0⤋
balloon financing is a plan where you pay a small monthly payment for a fixed period, then 1 HUGE payment at the end.
2006-06-13 19:12:08 · answer #4 · answered by Black Fedora 6 · 0⤊ 0⤋
This typr of finanacing refers to the interest rate changes. It starts off at a low interest rate then balloons to a higher rate as the term of your finance progresses
2006-06-13 19:12:18 · answer #5 · answered by mailbox1024 7 · 0⤊ 0⤋