Essex Credit and Boat Refi - Any experiences?-gctid393944

[Guest]

I saw an add in this months SEA Magazine for Essex Credit and with boat rates improving (along with my credit score) I went ahead and applied and got approved for a great rate and term. Everything I wanted basically and under the "to good to be true" concern, has anyone had any experience with these folks or heard of any issues with them?

[itsabowtime2]

No, but keep us posted if it works out well.

[Guest]

Yes, I work with Essex and most other lenders all the time; they are a great broker to deal with. Their transactions are pretty straightforward:

• apply
• qualify
• close

Enjoy your new loan!

[smitty477]

We have had great experinces with Essex numerous times either directly or through Costco in the NY area.

Conversely - we had an absolute terrible experience with Scott Financial Services (Ct) this past March - be cautious.

Hope this helps.

[2850Bounty]

For those who may be replacing a current loan, make certain that you understand how your interest and loan amount was derived.

If you now have a pre-computed loan, this is a standard principal and interest loan whereby the interest and principal payments are "pre-computed," or pre-calculated. Once you sign, you'll need to repay every dollar owed in the contract, no matter if paid off early.

IOW, the long term interest is rolled into the total loan amount, making it senseless to refinance only to pay interest twice.

If you have a simple interest loan, then refinancing to a lower rate is great.

.

[Guest]

So for the heck of it I called my current Credit Union lender and for $75 they gave me a better interest rate so I just did that but heck for $75, I got a 2% reduction to below 5%. They offered a refi but I didn't want to change the loan length and it was only $100 if I did want to do that...

My lesson learned from this was GO ASK, I am going to have a ton of money of the life of the loan with a five minute phone call!

[itsabowtime2]

Awesome. Glad it worked out for you!

[Guest]

2850Bounty wrote:
For those who may be replacing a current loan, make certain that you understand how your interest and loan amount was derived.

If you now have a pre-computed loan, this is a standard principal and interest loan whereby the interest and principal payments are "pre-computed," or pre-calculated. Once you sign, you'll need to repay every dollar owed in the contract, no matter if paid off early.

IOW, the long term interest is rolled into the total loan amount, making it senseless to refinance only to pay interest twice.

If you have a simple interest loan, then refinancing to a lower rate is great.

.

That is totally untrue.

When you want to pay off a precomputed account ahead of your contractual obligation, you are entitled to a rebate of the unearned finance charge based on the sum of the balances known as the Rule of 78's. The balance of a precomputed account includes the total finance for the full term of the contract. If it is prepaid in full before the maturity date, the unearned finance charges are subtracted from the balance to arrive at the amount due at time of the prepayment in full.

The Rule of 78's is so named because a hypothetical installment account with a term of 12 months has 78 units calculated by adding the numbers 1 plus 2 plus 3, etc. through 12. To compute the Rule of 78's decimal you take the number of months remaining in the term of the contract times that number plus 1. You divide that number by the number of months in the term times the term plus 1. The Rule of 78's decimal is then taken times the finance charge to compute the rebate.

In essence, this means that you pay higher effective rate at the beginning of the loan and less at the end, howver you are still entitled to a credit for unearned interest no matter when you pay it off if it is prior to the end of the term. You simply compare the total amount of payments for each scenario to determine whether it is a better deal when you are considering refinancing. Most retail contracts are precomputed.

RULE OF 78 EXAMPLE:

$5,000.00 amount financed

$1,166.32 finance charge

24 payments of $256.93

21% annual percentage rate

Date made 1-10-12

First payment due 2-10-12

Date prepaid 11-11-12

There are 11 months earned on the account (the creditor can take a full months earnings for 1 day into the next month in this example) and 13 months unearned. You can compute the rebate as follows:

13 X 14 divided by 24 X 25 = 182 divided by 600 = .3033 Rule of 78's decimal

$1,166.32 X .3033 = $353.74

The finance charge rebate would be $353.74.

The lender earned 69.67% of the total finance charge during the first 11 months of the 24 month contract. Finance charges earned by the Rule of 78s are the highest for the first months of the term because the balance of the amount financed is highest during that period.

Class is dismissed.

[Guest]

when in doubt about a lender

go to www.bbb.org

and always check your local credit union especially if you have an established account / history with them.

boat happy!