BeerCheeze
Rated XXX
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 Posted: Wed, 01 Jun 2005 00:21:36 Post Subject: Why I hate de bankz |
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Ok.. so as most of you know Misty and I just bought a house (yea for us)... well the bank we have the loan with set us this thing to help you pay off your loan earlier. Here's the plan....
They take your MONTHLY payment and convert it to a BI-WEEKLY payment. They cut it in half, and of course they a few $$$ to each payment because their is a $5.42 monthly participation fee. Plus of course their is a $295 one time enrollment fee.
Their plan would turn a 30 yr loan into a 24 yr 5 month loan. Not bad huh? Pretty good deal... and dam white of the bank for doing that for us.
Hopefully you did some simple math and figured out where this magical savings comes from. A Bi-weekly schedule means you make 26 payments a year (52 weeks a year, `memeber) so what you are really doing is making an extra payment a year, and paying them for the privilege of doing something you could do free on your own. Which if you did, would cut the loan down by about 2 months more than their plan and save us an extra $3700. Also it makes our real monthly payment $163.68 more than what our payment is right now. So if we just instead added that to our payment each month (which we can do by the terms of the loan) we would pay off the loan about 4 months earlier than their plan, and save us an extra $5700 off their plan.
 People are stupid!!! They obviously do this because enough people fall for it! Gawd... people fail simple math!!! |
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