Yes they are equal to a point. Interest rate and payback should be the same but late payment fees will most likely be higher on a credit card and they can jack up the interest rate with 1 late payment. A secured car loan won't hurt as bad in late fees and they can't jack up the interest rate. However If you take out a car loan and fail to make the payments your car maybe repossessed. A credit card is usually an unsecured loan and they can't take your car until they file in court or you file bankruptcy but even then they may not get your car as collateral. I'm assuming Elios credit card will be a secured card with your Elio being the secured property.
-
Welcome to Elio Owners! Join today, registration is easy!
You can register using your Google, Facebook, or Twitter account, just click here.
Bank Loan Rates For Buying Your Elio
- Thread starter Cache Man
- Start date
Cache Man, cosigning for someone is not a good idea. They fail to make a payment and its a ding on your credit. My parents helped me establish credit by giving me $1000 and putting it in a savings account. I then went to the bank and took out a 12 month $900.00 loan using the $1000 as collateral, the bank froze the savings account until the loan was paid back. I gave my parents the $900. At the end of that year I gave my parents back the $100 I still owed them with interest and I had a credit history and $1000. I then went and purchased a better car with my new credit history and money. Then I screwed it up, over the next few decades. Debt was easy to get into, harder to get out of. Today many years later we are older and a lot wiser. No debt but the mortgage. I wish I knew then, what I know now.
Cache Man
Elio Addict
Craig, You will have to look at the fine print on your credit card information. Maybe you can contact the card carrier. I could not tell you for sure. Maybe some one will post a comment. Typically they are not.
Another thing to keep in mind is your credit to debt ratio on credit cards. If you have a $10,000 credit limit on a credit card the maximum balance amount you should carry, should be no more than $3,000, or 30% of your available credit. Anything higher will result in a ding on your credit score because your debt to credit ratio is higher than 30%. If you have more than one card, it's the same for all of them. No more than 30% on any one card, unless you pay it down before your statement closing date.
On the other hand, if I lost my job and am on a loan the Elio could be repoed
Yes it could be but that's a chance we all take, when we take on debt. Will I still have my job tomorrow? However one thing a lot of people don't realize is that financial institutions are willing to work with people if given the chance. If you loose your job, call all your creditors before you miss the first payment. Explain what's going on and ask to have the loan or payment floated (no payment is due but interest continues to accrual) or pay interest only but no principal for a few months. You'd be surprised how many creditors are willing to do this, if people only asked, most don't and wait until the harassing phone calls start, before they deal with their creditors. Be proactive, not reactive, when dealing with debt.
Jeff Porter
Elio Addict
- Joined
- May 20, 2014
- Messages
- 2,086
- Reaction score
- 5,343
I was wondering if anyone else has contacted their bank/Credit Union to see about a loan for their Elio? I contacted a local credit union and they said because the "car" is so new and there isn't an established resale value and the loan interest rate will be higher. This is because if they need to repo the car they don't know if they can recover their money or how fast it will sell. The estimated rate is about 9.0% for the new Elio "car" but for the "autocycle" (it may be classified as a motorcycle/RV) the rates are higher. They hadn't heard the term "autocycle" yet. They said they do not know for sure what the rate will be until it is out on the market. I may have to pull the "Loyal customer" to influence the rate!
- Are most people planning on paying cash?
- Or for those planning on financing their Elios, have you looked into this already? What are you being told?
- Any more info on the Elio financing program?
I did contact my insurance agent about insurance, answer was no problem they would insure it. But I have not contacted my bank to see about a loan.
The gas credit card has been discussed. Details that I remember: if you buy say $15 in gas on the Elio gas credit card, you would get charged $45, and $30 of it goes towards a car payment to Elio. Obviously there would have to be some minimum monthly car payment that would be around $150, depending of course on the size of the amount financed on your account with Elio. And yes, no word on interest rate or other details.
And yes, everyone's financial situation and details and history and credit score and debt ratio... will all be specific and different.
Jeff Porter
Elio Addict
- Joined
- May 20, 2014
- Messages
- 2,086
- Reaction score
- 5,343
As other folks have stated, you'll have to really research the credit card terms and then the standard loan terms.
A personal story: I took my $750 upgrade on my Elio reservation last August, and put it on a credit card. Before that month's payment was due, I did a balance transfer to a special card that had 0% interest for 14 months. Because I did research and called the credit card company, I learned that I needed to make the minimum monthly payment each month for the next 14 months, then pay off the balance. If I miss a payment, interest at a very high rate gets added to the balance for all previous months. As you can see, the 0% interest is great but I still had to plan for a payment.
You just have to really learn and ask questions and feel confident you understand, then you can make the decision on a bank loan or a credit card for what works best for you.
LillyMayPatterson #1685 & #5648
Elio Addict
Josh if you withdrawl the money from your 401k you are subject to regular tax + 10% penalty tax for a withdrawal prior to age 591/2. If you take out $10,000 with a 15% tax bracket and 10% penalty it will cost you $2,500 in taxes and leave you with $7500 for your Elio. Better to take the loan against the 401k than a withdrawn. Even better work on your credit score over the next year and try to get your number up. There are several ways to do this, just do a little research on line. This will give you more leverage when the time comes to get a loan for your Elio. You could qualify for a loan with an even lower rate than your 401k offers. Also remember if you take out the loan on your 401k you pay back the loan with after tax dollars and get hit again in taxes later in life when you start to withdraw in retirement. So in essence you will have paid taxes twice on that money. Not a wise financial move for anyone. Trust me, I know from experence.
Oh My Yes. DON'T Mess with the IRS or your 401 !!! I got into big trouble doing this ... I was completely innocent but it was a big PITA proving it. I framed the IRS letter that finally said we didn't owe the big money. It's hanging on the wall in my livingroom. Not to bring in politics but You Do Know a Tea Party Member that was Harassed by the IRS. I had my passport held up, my drivers license suspended, threatened with jail time and the dog catcher visited. OK, the neighbor man got into trouble with his dog and they just checked the whole neighborhood. But, still don't mess with your 401 or the IRS.
Jay3wheel
Elio Addict
.
Actually, if you lost your job you would not owe the balance on the loan, but the loan balance would become taxable income in the year of your job lose.
I would never recommend using 410k money for a car, only for a house.