Continued from [1]
The latter was her only option so she went and talked to her father about getting her motorcycle loan co-signed. She didn’t feel good about asking her father again for help regarding this motorcycle loan since he already offered about $3000 for a down payment, but she really wanted that motorcycle she was going to need a cosigner and her mother once again was not willing to take part in helping Julie get a loan for a Harley Davidson.
Julie went to talk to her Father again. She told him how much she really wanted this motorcycle (it was all she could think about) and she also added that she would use it for getting to work and back and that using public transit was no longer a viable option with their busy schedule.
For those of you who have never been to Modesto California, it is a beautiful city with lots of well looked after roads, freeways, highways, and alley-ways. Modesto California is ideal from motorcycle owner’s who drive for pleasure and for point A to point B.
Julie’s father agreed a motorcycle would be a natural choice for Julie with all her childhood experience riding with their brothers (who still ride motorcycles constantly). She had taken the courses necessary to become a safe motorcycle operator and she wouldn’t be much of a risk to herself or other motorists.
Julie’s father also owns motorcycles – he owns three different motorcycles. He owns an old Norton motorcycle, a Honda Gold Wing, and a vintage 1967 Harley Davidson which he completely refurbished himself. Julie rode her father’s Gold Wing all up and down the California coast. She rode his bike through Los Angeles and through Orange County and kept riding for hours. She loved the sensation of her hair blowing back in the breeze and the wind in her face.
Anyways before I digress – back to her story and Julie’s motorcycle loan. Her father agreed that he would cosign her motorcycle loan on the condition that she would help him clean up his house once a week and she would be very careful on the road with her new bike. Julie agreed and thought this was an ideal situation because not only did she get her bike financed she could also see her father more often. Julie knew her father would not demand much from her as far as cleaning up his house anyway.
So Julie made an appointment with the dealership and told them she had a cosigner for her motorcycle loan, and that she would like to sign the papers as soon as possible.
The loan officer handed the loan agreement to her father who explained that is was a typical form for lending terms. Julie’s father was no dumb bunny and he read the motorcycle loan agreement in depth. He noticed that the APR she was spending was a high rate of 9% and thought this wasn’t fair since his daughter had an unblemished credit history.
The dealership said she had no credit rating because there was no record of her past behavior and possible delinquencies – this is why the rate was so high. Julie’s father didn’t stop there and asked the loan officer about the true APR or the EAR (effective annual rate after fees and compounding interest) Julie was in a position where she could not make an error by missing a single payment on her motorcycle. He also noticed that the basic servicing fees on the motorcycle loan were high.
As a result of these revelations Julie’s father negotiated with the dealership to have the fees reduced dramatically and have the interest rate (or APR) brought down to 7.2%. This was a huge savings for Julie and she was breathing a huge sigh of relief knowing that her father had saved her so much money. She was so glad that she asked her father to cosign the loan and that he came along to help her negotiate a better deal on financing.
Many lenders (for all different types of loans and different loan products) have different sets of criteria they use for borrowers coming to get a loan.
You need to understand that you can negotiate your rates, your fees, and your compound interest terms. Even if your credit rating is questionable, you still need to push for a better deal.
Other Posts of Interest
A LOAN CALCULATOR FOR CRUNCHING YOUR NUMBERS IS BELOW; Enter your loan amount, how many years, the interest rate, and payment frequency (14 for biweekly, 30 for monthly, 7 for weekly. Very helpful so you know exactly what the loan will cost you in interest payments and you will know the total COB (cost of borrowing).
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