I wonder were these taxed at the full purchase price or taxed like a lease? Did anyone have great luck with these, thought about doing one for a corvette. Were they easy app, approval or did you have to send in a bunch of docs.
I have a PenFed Payment saver loan on my Tesla Model 3 and on a previously owned Challenger. They are taxed as a purchase, application was all done online and my approval was always instant. Hopefully this is not the end of the line, because they are a great option where you can find a favorable RV.
I just had a giant lunch so I may be even less lucid than normal, so please bear with me.
I understand the difference the RV would make on the monthly payments, but it’s not like you can give the car back at the end of the term like on a lease (at least on the balloon loan PenFed most recently offered).
Take two $50,000 cars, one with a 50% RV and one with a 40% RV. Same APR.
The payment would be lower on the 50% RV, but with the larger payment wouldn’t you end up with more equity and therefore spend less on interest over the same amount of time?
There have always been specific reasons why I opted for a balloon loan.
With the Challenger, Dodge was still offering power dollar rebates with a purchase, but not with a traditional lease. Using the balloon loan qualified me for thousands in additional rebates versus a CCAP lease.
With the Tesla, it’s about the ability to sell the vehicle, at any time, and not be forced to return it to Tesla. This allows me to recoup the equity locked in the vehicle, which would otherwise be lost w/ a Tesla lease.
Generally, I do think a balloon loan makes sense for short term purchases. Given your RV example, if the desired ownership term was only 6 months. I would rather keep the equity in my pocket, during that time period, then in the vehicle. Given most APR’s are pretty low right now, the difference in interest paid, for such a short term, is fairly insignificant.
In “normal” times? On a typical (not speciality, not for purchase only incentives, not to avoid a closed-end lease) vehicle??
I wasn’t questioning the logic of a balloon loan vs. lease; I understand why someone would do one vs. the other in various scenarios.
I was just wondering what the logic was behind wanting a higher RV on this type of balloon loan since a lower RV would cost less when it all washes out.
But regardless it’s clear that people generally aren’t doing these to save money.
Out of curiosity, for those who have balloon loans, what’s your APR?
I just looked at our HELOC and it’s currently 3.13%.
Sample deal: I could get into a Flying Spur for nothing down and $0 per month until the end of the 10-year draw period.
I’m half kidding.
He is more focused on the monthly payment than the total cost of ownership. I think that’s the reason why he loves Penfed balloon loans.
Back in 2019, PenFed briefly offered balloon loans with guaranteed residuals (you could walk away at the end of the initial term), but they quickly discontinued those also.
As my grandfather would say, this place can’t find its ass with both hands.
Does anyone know who else offers payment saver loans? It seems many local credit unions offer them but all require specific membership criteria (impossible given I am not in their area).
Any options I have found, the rate has been at 4% and greater.
No match for the 2.99% 36mo rate that PenFed offered.
FWIW the AFG calculator is a good resource to play around with numbers: AFG Calculator
Sorry, I do not. This isn’t a product that’s useful to me.
I just thought there would be interest in PenFed discontinuing their offering, given the flurry of recent discussion in other threads.
Have they stopped all new vehicle finance options? or just a certain type of loan
Just a certain type.
You can look through AFg’s website in the press release section. They usually announce all the small CUs they sign each quarter. Those would be your best bet to see if there is one you can work with. PenFed was their only national CU and the rest are all small that serve a group of counties in various states.
PenFed dropping the balloons is very interesting. That means they are most likely not seeing the originations that afg sold them on. They had been very interested in leasing for years and then made a last minute decision to go with balloons based on a middle man who I think had a piece of the deal.
I’d guess they will turn on a lease program sometime in the next year or two. Stay tuned!
Damn I just picked my 2021 trd pro 4runner with this Penfed program back in June. Taxes on full vehicle price were paid on vehicle upfront. Had no issues with penfed.
Any chances this program comes back? Would love to pick up other vehicles with this program.
If they truly killed it an didn’t just pause it, there is almost no chance it comes back.
Latest BALLON LOAN options (best to worst):
CapEd Credit Union (https://capedcu.com/)
They offer a payment saver loan option (via AFG) at a 3.84% rate. Membership to the CU is possible via a $20 donation to CapEd Foundation. Also offers a 2.14% rate for 96 months, so one application gives you both options. Uses transunion credit for initial score
Hanscom Federal Credit Union (https://hfcu.org/)
Better then a lease loan offering is backed by AFG at a 3.74% rate. Membership to the CU is possible via a $35 donation to Nashua River Watershed Association. Uses transunion credit for score.
AmeriCU Credit Union (https://americu.org/)
Membership via $15 one-time donation to American Consumer Council. Uses experian for credit score. Payment came back very high, not sure what rates/fees they used.
Teachers Federal Credit Union (https://teachersfcu.org/)
Open membership, anyone can join. Paysaver rates not posted, but you can apply for paysaver loan via the website. Uses transunion credit for score. Came back with a rate over 5%
Regional options (not-open-membership) to consider:
SEFCU (NY),
MountainCrest FCU (WA),
Vermont FCU (VT),
Frankenmuth CU (MI)
Lowest available BALLON LOAN rate found was 2.49% but I did not qualify. Note that fees charged between providers can vary. At minimum, expect a $725 origination fee for vehicles over $75K. In one case, I was quoted $1500 for origination. Expect a hard pull immediately after submitting your application online.