Everyone loves a great deal, right? There’s just something about being able to save a buck, finding that one item on clearance, or filling up the tank in the morning only to see gas prices go up that evening. (Don’t worry, no one saw the fist pump as you drove by…)
I remember years ago when a young lady walked into the credit union I was working for at that time. She was so excited to be the proud owner of a brand new Ford Mustang. Owning that car was a sense of accomplishment for her. The problem was the payment. A whopping $870 bucks. Wow! (No offense, but ‘for a mustang?’) She wanted a lower note so she came to see us. She handed over her financing paperwork and the problem was evident: the financing rate was 28%! (Average rates at that time were anywhere between 5-10%.) “I didn’t even realize what I agreed to,” she said. By the time she would finish paying for the car, she would have paid over $24,000 just in interest. Not a great deal. At all.
That day, the credit union refinanced her loan at a lower rate and dropped her payment by $300. She was saving $20,000 in interest. $20,000 in interest! I think I actually got a hug.
I’ll never forget that young lady and often wondered how the finance company slept at night. How many other people are out there that don’t realize what they’re getting in to? It’s frightening. That’s why we love what we do at credit unions. That day was a great day. Almost better than a sale.