Is a 0% Auto Loan Good for You? - Wheelhouse Credit Union

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Introductory rates as low as 7.99% APR* for the first 12 months(1). Home Equity Line of Credit. LEARN MORE. Copyright 2024 Wheelhouse Credit Union. Equal Housing Opportunity.

* APR = Annual Percentage Rate.
Rates are effective as of 09/01/2024 and are subject to change without notice. Rates are based on creditworthiness. Introductory rate is fixed for the first 12 months.

¹ Wheelhouse® Credit Union’s primary area of service is Southern California which includes San Diego County. Your home must be owner occupied and located in our service area. Introductory fixed APR is based on a combined loan-to-value (CLTV) and will remain in effect for 12 months from the date the Home Equity Line of Credit (HELOC) Agreement and Disclosure Statement was signed. Thereafter, the introductory APR will revert to a variable APR and will be adjusted on the first day of each billing cycle based on the WSJ Prime Rate + a margin up to 3.00% depending on loan parameters. As of 07/27/2023, the APR ranges from 9.50% – 11.50% APR. The maximum APR that can be applied is 18.00% and the minimum is 3.99%. Maximum credit limit subject to CLTV guidelines. Minimum credit line available is $25,000. You can obtain advances of credit for 10-years (Draw Period); the Draw Period will be followed by a Repayment Period as outlined in your HELOC Agreement. Property insurance is required. All loans are subject to credit approval, income verification, and satisfactory appraisal and collateral. Rates, terms, and fees are subject to change without notice. Please consult a tax advisor regarding the deductibility of interest. Download this PDF guide to learn more about What You Should Know About Home Equity Lines of Credit.
Draw Period: You can obtain advances of credit for 10-years (Draw Period). During the Draw Period, your minimum payment will equal the total of (a) the periodic finance charges, and other fees, charges and costs including without limitation, any other expenses or advances incurred by us under the Security Instrument and (b) accrued but unpaid interest for prior Billing Cycles. The Draw Period will be followed by a Repayment Period as outlined in your HELOC Agreement. During the Repayment Period, if any, your minimum payment will equal the fraction as outlined in your HELOC Agreement of your unpaid Account Balance at the end of the Draw Period, plus all periodic finance charges, and other fees, charges, and costs. All payments will be due monthly. The minimum payments may not be sufficient to fully repay the principal that is outstanding on your HELOC. If they are not, you will be required to pay the entire outstanding balance in a single payment and a balloon payment may result. Your minimum payments will not repay the principal that is outstanding on your line. You will be required to pay the entire outstanding balance in a single payment.

Minimum Payment Example: The information provided is based on an initial $10,000 advance at funding on an existing single-family home used as a primary residence. The assumed credit score is 720 with an assumed CLTV of 75% and a credit limit of $100,000.

During the 10-Year Draw Period
• 12 payments of $66.58 at an initial interest rate of 7.99%.
• 108 payments of $79.16 at a variable interest rate of 9.50%.

During the 20-Year Repayment Period
• 239 payments of $93.27 at a variable interest rate of 9.50%.
• 1 payment of $89.25 at a variable interest rate of 9.50%.

Other terms and conditions may apply. Equal Housing Opportunity. Membership required.

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Posted on July 30, 2020March 14, 2024 by Manix Phayvanh

Is a 0% Auto Loan Good for You?

Crazy question, right? It sounds great. But getting a zero percent loan can actually cost you more money compared to a low interest rate loan. If the dealership gives you the option of a 0% loan or a rebate of some amount, you may end up paying less for the vehicle by taking the rebate and financing through a low-rate loan.

First, Some Math
Some dealerships are offering rebates up to $12,000 off MSRP for select vehicles.¹ That’s a lot of money you could save! Of course, a rebate of that amount is less common than a rebate of a few thousand dollars, so let’s use a more practical example:

You’re looking at a car for $24,000 and you can either take a 0% loan or receive a rebate of $5,000. If you take the 0%, you pay the $24,000 in the long run. If you take the $5,000 rebate and finance a loan for $19,000 at an interest rate of 2.69% APR* for 66-months, you will end up paying $1,461.42 in interest, or $20,461.42 total.

As you can see, in the long run, you saved a few thousand dollars by taking the rebate over the 0% loan. Of course, this won’t always be the case and the details of your circumstances will differ. The point here is to not jump in to a 0% interest loan without comparing your options.

To help you explore your options, feel free to use our “Compare Two Vehicle Loans” calculator or call one of our Member Service Representatives at 619-297-4835.

*APR = Annual Percentage Rate.
¹According to the article Top Car, Truck, & SUV Rebates in July 2020 posted on CarsDirect.

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