Offered reduced trailer payoff - do I take it?

[Maddykins06]

We financed a travel trailer & have $13K left on our loan.
Never missed a payment, never late.

Received a letter from PNC (our lender) offering a $10K payoff.
Yeah, we'd save over $3K by doing this, but WHY would they offer it?

(Yes, I'm going to call & find out - just wondering if anyone had experience wiht this?)

 

[Muushka]

I have no idea.

Way back in the really scary 70's when interest rates were in the teens, my sister's mortgage company offered them a discount of 25% of their loan if they paid it off (their rate was around 8%). They did and it was a smart move. But today with the gov promise of low interest rates, it makes no sense.

I will be curious to hear what you find out. Do you think you will do it?

 

[angierae]

We financed a travel trailer & have $13K left on our loan.
Never missed a payment, never late.

Received a letter from PNC (our lender) offering a $10K payoff.
Yeah, we'd save over $3K by doing this, but WHY would they offer it?

(Yes, I'm going to call & find out - just wondering if anyone had experience wiht this?)

My guess is that a lot of people are defaulting on things like boats, campers, etc. They figure getting 10k from you now is a safer bet than you deciding you can't make your payments. It isn't anything against YOU personally, just that when people have financial problems, "extras" like this are the first things they stop making payments on. The bank is trying to cover their butts.

 

[bpesch]

I agree with Angierae. It's likely the finance company is dealing with a high rate of foreclosures or defaults and figures the "bird in a hand" adage is a better bet for them.

 

[QVCshopper]

If you have the cash, I'd do it. You'll save interest and $3k. Not bad...

 

[barbarabini]

Around 2008, i recall there were quite a few people reporting the same type of offer from some credit card and other financing co. They weren't in default, but did recieve an offer in the mail similar to yours.

I am guessing, the bird in the hand theory .... as well as maybe the finance co has been unable to sell its debt, on the secondary market.

If you have it, you may as well take it. (or see if they'll do a little better - maybe you only have 9000 in one lump sum).

 

[csharpwv]

I totally agree with the PP - if they are willing to take $10,000 on payoff - they would be willing to take $9,000 on an immediate lump sum payment.

Haggle them a little - get what you want!

Then take what you saved and go to Disney! HAHA

 

[Minnesota!]

We got a similar offer last fall on our home equity loan. We got $40K knocked off if we could pay it off within 2 weeks. Lots of scrambling done - but we did it!!

It was a fantastic deal and I am so glad we were able to take advantage!!!

If you can do it - DO IT!

 

[girli565]

I agree with a previous poster, if they're willing to take $10k I'd haggle and pay less. Offer low and then work your way up to the $10k. Anything under the $10k is a great deal! Heck the $10k is a deal!

 

[marius97]

I would only have one question for them...Is this a situation like with a credit card where you are behind and they offer you a lower amount to settle the debt? In that circumstance (at least from my understanding) is that the amount forgiven is considered as income and is taxable. I'd just be aware of that and figure that into your calculations.