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Tuesday, November 9, 2010

Finance

Okay, so, I've had this loan with a predatory lending company who shall remain citi financial nameless for over two years.  I've been paying a minimum of $277 a month - for a long time I was paying $300 to help cut the interest.
The interest rate has been moved down from 25% (!!!) to 22.99% - which they claim is the lowest they can offer.
So far, I have been unable to refinance this loan with any other establishment - banks, credit unions, etc.  Apparently, they are concerned that I may not be able to pay a lower payment with lower interest. ????? Seriously?  Two and a half year track record of paying higher payments with higher interest and you think I'll quit now?
This is a prime example of the financial industry's practice of keeping people down.  There is no real risk of me suddenly not paying this.  My "numbers" don't figure out correctly, so nobody will cut me some slack on this interest rate.  Whatever the payment turns out to be, I'd still pay over that amount - maybe that is their problem, I cut into their profits by paying it off quicker.
Bottom line is that I have to pay more money than someone who already has more money.
I've tried again, which is why this is on my mind - in my head - right now.  If I don't get this one... I'll try again after I've gotten my Income Tax Refund and paid my balances down more.

Update : 11/21/2011
It took a long, long time, but I've refinanced that loan.  I am now paying 14% interest.  Not great, but a LOT better than 23%!  I've also consolidated a couple high interest credit cards into a lower interest (11% instead of 22% or more) loan.  Oh, yeah, the Myth of the "Income Tax Refund" payoff... its never enough and something else always comes up.  Even this year coming up, I will be using the refund - which should be bigger - to make repairs to my car.

And why is my refund going to be bigger? Well, that is the awesome part.  If it works like I calculated... I switched some stuff up in my Health Care cost planning...  I increased my deductible on my work health insurance, lowering my premiums.  I stopped the Flexible Spending Account (pre-tax) and went with a Health Savings Account at a local Credit Union.  This way, the contributions I make to the HSA are tax deductible, but I paid taxes on them, so at the end of the year, I get that tax amount back - my federal savings plan.  I earn interest on the amount in the HSA.  I would like to keep the HSA at twice my deductible at least, but I am not there yet.  There are no catches to the HSA like with the FSA, which was spend it all or loose it.  The HSA contributions I make while healthy could still be there - gaining interest - when I am older and not as healthy.