722redemption.com

[tigergem]

Yeah, I looked at that when I was deciding whether to go with the Chapter 7 and a 722 redemption or Chapter 13. I made out a whole lot better with my cram down and Till rate, which is why I went that direction.

[jmanford]

Thanks a TON for doing the math for me HHM. I really appreciate it.

[HHM]

I think their interest rate is really high. Something like 24%.

True enough, but you need to review the whole deal, let's look at a hypothetical situation.

Current loan
Balance due $24,000
Term remaining, 48 months
Interest Rate 8%
Total Interest reaming to be paid $4,123.69
Total to be paid, $28,123.68

Proposed Redemption Loan
Balance Due $14,000 (CMV of vehicle)
Term, 48 months
Interest Rate 24%
Total interest paid: $7,908.43
Total Paid over life of loan. 21,908.64

Redemption yields a net savings of $6,215.04

The real savings in redemption occurs if you can shorten the term, if you did the above redemption loan at 36 months, your NET SAVINGS would be $8,350.32, and your total interest would be $5,773.36 notwithstanding the higher interest rate.

[tigergem]

I think their interest rate is really high. Something like 24%.

[jmanford]

Thanks!

[HHM]

I have a 24k loan through Honda Finance and the car is a 2009 worth about 14k. I'd like to keep the car. Do you think a redemption loan is good in this situation?

That is probably the IDEAL situation for redemption. You should definitely start exploring it.

[tightgrip]

Watching I am wondering the same thing with us . . . .

[jmanford]

I have a 24k loan through Honda Finance and the car is a 2009 worth about 14k. I'd like to keep the car. Do you think a redemption loan is good in this situation?

[HHM]

Realize, you are talking about a redemption loan, interest rate is fairly meaningless because not to many organizations offer it, so it's not like you can really go interest rate shopping.

Realistically, you are looking at very high teens to low twenties for interest rate. Keep in mind, you cannot just focus on the interest rate, you need to look at the over all deal. If yo are blowing away $5000 of principal on an existing loan through chapter 7 and using a redemption loan to buy out the secured portion, even with a higher interest rate, you come out ahead.

[jmanford]

Has anyone tried this? What kind of interest rate can you expect? advice please.. thx