Questions on balloon financing

[Hustler]

I received a good offer on a Stinger using balloon financing. I was planning to go with the lease buyout but this seems easier.

The dealer is in Arkansas while I live in Texas. Would this cause any problems?
Is the baloon financing also done through KMF?

Is there any common trap that I should look out for when going for balloon financing? I?m planning to pay it off asap.

 

[nhcowboy28]

I received a good offer on a Stinger using balloon financing. I was planning to go with the lease buyout but this seems easier.

The dealer is in Arkansas while I live in Texas. Would this cause any problems?
Is the baloon financing also done through KMF?

Is there any common trap that I should look out for when going for balloon financing? I?m planning to pay it off asap.

Interest rate is generally higher. And the bulk of the principal is left at the end... so you need to plan for it.

If you can?t afford the normal monthly payment, then you are hedging your bet that you?ll have enough later to pay it off. I dislike this mentality. If you can?t afford it now, you can?t afford it later. But that?s my opinion.





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[Hustler]

Interest rate is generally higher. And the bulk of the principal is left at the end... so you need to plan for it.

If you can?t afford the normal monthly payment, then you are hedging your bet that you?ll have enough later to pay it off. I dislike this mentality. If you can?t afford it now, you can?t afford it later. But that?s my opinion.





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I think tou overlooked my comment that I want to pay it off asap, meaning within 1 or 2 months after purchase. This is just a way to get extra rebates and an alternative route to the lease buyout.

 

[nhcowboy28]

Then it?s like any loan. Sooner you pay-off, the less interest you?ve payed overall.



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[Hustler]

Then it?s like any loan. Sooner you pay-off, the less interest you?ve payed overall.



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I think we are aligned on that.

 

[Mikejr74]

Check the fine print of the finance agreement. Balloon loans and Rule of 72 loans have notoriously had high early termination expenses.

I received a good offer on a Stinger using balloon financing. I was planning to go with the lease buyout but this seems easier.

The dealer is in Arkansas while I live in Texas. Would this cause any problems?
Is the baloon financing also done through KMF?

Is there any common trap that I should look out for when going for balloon financing? I?m planning to pay it off asap.

All posts are for entertainment, are my opinions and not meant to be acted upon. All photos are copyrighted and not for use by others, without express written consent by me.

 

[Hustler]

Check the fine print of the finance agreement. Balloon loans and Rule of 72 loans have notoriously had high early termination expenses.

All posts are for entertainment, are my opinions and not meant to be acted upon. All photos are copyrighted and not for use by others, without express written consent by me.

That's a very good point, thanks.
Does anyone have experience if the KMF balloon financing includes early termination fees?

 

[oddball]

That's how I got my GT2 here in TX. The taxes on leases in TX make the lease cash buyout approach very unfavorable.
KMF's terms are good. Yes, the interest rate is high (6.25% - 7%) but that doesn't matter if you're moving the debt elsewhere. No early termination fees - it's managed just like a traditional loan just with a huge remaining principle.
Just talk through the deal with the dealership and make sure the taxes and registration are handled correctly.