9/14/2009

This Weekend & The Bank

I don't believe that I have written about this before, but about eight months ago Jordan was looking to buy a small, used, truck for himself.  After much debate, we decided on a 2002 Ford Ranger.  The truck, although it has high kilometers, would be perfect for us.

We took out a personal loan for $4,500, during the application process we learned that Jordan's credit was not steller.  He was actually one of the SMART 18-20+ year olds who didn't sign up for a credit card as soon as he was legally able to.  Unfortunately, that also meant that his credit score was not very high because he's never had credit.

He signed up for a secured credit card and we are currently working to build his credit (which is a whole other post topic).

So, back to that loan.  The bank wouldn't give him a loan by himself, so I offered to co-sign.  In a super ridiculous move - the bank STILL wouldn't approve the loan (I do have a great credit score).  We then tried to get the loan with JUST my name and the bank pushed it through no problem.  I think, this is lame.

Anyways, this weekend Jordan decided to up the frequency of his payments and effectively increase the amount he's putting towards the loan each month.  What a process that was!

The bank lady who had apparently 'done lots of loans before', had never made such changes to an existing loan.  Apparently it's a pretty rare thing for people to want to pay their loans off early?!  So the whole process took well over an hour and it shouldn't have taken more then 20 minutes (the way I figure it).

oh, I didn't yet mention.  The way Jordan and I worked out the loan and payments is that yes the loan is in my name but all of the payments are debited straight from his account.

So he went from paying $216/month, which was what the computer calculated would take 24 months to pay off the loan, to $150/bi-weekly.  This increase in frequency and amount will shave off about 6 months on the loan.  It should be paid off by July/August of 2010.

Jordan is now 100% on board with bi-weekly contributions to savings/debt repayment ect.  It works sooo much easier then monthly budgeting!  He also split his RRSP contribution in half and is now doing that bi-weekly as well.

Although the experience at the bank was a little crappy, I'm so happy that Jordan decided to ramp up his debt repayments.  Having all of our debts paid off within the next two years will make our home buying experience in a few years time, that much easier.
Reactions:

3 comments:

  1. Smart move, you guys!

    ReplyDelete
  2. Oh that will feel so good once that payment is KILLED for good!

    ReplyDelete
  3. Actually...

    When my mom and I bought my scooter, I decided that it would be solely in her name, and not have me on as a cosigner because I was worried me being on there as well would either ramp up the interest rate, or kill it entirely. I know, doesn't make sense, two payers should be better than one.

    ReplyDelete

Hi! Thank you for stopping by and leaving a message.

Followers

Links ♥