[Alex_bm]

Has any-one done this to tell how it works?

Thanks

[achien]

don't do it!!! unless you have a lot of cash, or expect a lot of cash coming (i.e. inheritance), at the end of the financing period.

it starts with a very low monthly payment (i.e. $500 - $900 per month), but you owe a huge balance at the end (i.e. 40% to 60% of the car, depends on how large and how long your monthly payments are), which you may have to find a bank to finance your car at 7% to 10%.

Originally Posted by Alex_bm

Has any-one done this to tell how it works?

Thanks

[itrocks4u]

I think they give you an option to re-finance as well at the end of your first term. Or you can pay it off if you have the cash. the purpose of balloon financing is to lower your monthly payments.

It's the same concept as the lease, but you have to buy the car in the end and can't just walk away like in the lease.

[ericlol]

well, its like, u separate the payment into 2 portion, say the principle amount is 55k
portion 1: 35050
portion 2: 19950

assume interest rate of 1.9%, 4 years

for portion 1, you are financing it over 4 years, as if you were financing a regular 35k car, say $770 per month

for portion 2, you don't have to do anything about it, until the end, the interest rate just accumulated at portion 2, using the simple formula for compound interest, you have to pay the future value amount after 4 years, 21500

total paid = 770 x 48 + 21500 = 58460

cost of borrowing = 58460 - 55000 = 3460

[Alex_bm]

I should have formalized my question to be more clear.
I already have a baloon finance deal, the deal is actually not too bad with 1.9% rate, the interest for the entire loan is around 2k.

The question is really what it take to transfer the deal to some-one else?

[d-burn]

Do you have someone in mind already, or are you looking for someone to take it over?

What are the details?

[Alex_bm]

pm'd

was hoping to get some additional information from people who have done it in the past

Originally Posted by d-burn

Do you have someone in mind already, or are you looking for someone to take it over?

What are the details?