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Are you ready to go into dept?

Discussion in 'The Lounge' started by hilldown, Sep 11, 2005.

  1. hilldown

    hilldown Chimp

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    Im about ready to get a small personal loan out to buy a really nice DH bike. Not really getting a lot of positive feedback from the non riders ( family) so I thought I could get some motivation from the monkey's. Or talk me out of it, but its a rad bike and Im sure I can pay it off. Did you guys just walk in with cash and buy your bikes? Is everyone else in the world loaded?
     

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  2. deweydude

    deweydude Monkey

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    yep :D :D

    I have plenty of debt but my bike is not one of them other than buying parts on a credit card.
    I would never take a loan to purchase something that is going to depreciate so badly when I walk out the door with it :nope: :nuts:
     
  3. Toshi

    Toshi Harbinger of Doom

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    don't take out a loan for a bike. that's just dumb. save your cash. the season's almost over anyway.
     
  4. Changleen

    Changleen Paranoid Member

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    Loans suck, period. At least loans with any type of interest. It took me 26 years to really understand that.
     
  5. Changleen

    Changleen Paranoid Member

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    Plus, if you can't spell it, you're probably not ready. :D
     
  6. seabass

    seabass Chimp

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    There is nothing wrong with a little debt. I wouldn't go the personal loan route though. The rates tend to be very high. Put in on a credit card and then switch the balance to a low rate on another card. My Merrill Lynch card is fixed at 5.9%. Pretty cheap money.

    I can't speak for the others here, but I am fortunate enough to be able pay for most everything with cash. However that wasn't always the case. As a young monkey it was either float a little debt or not have the bike I wanted. Paying a few bucks in interest is not the end of the world. Just don't let it get out of hand.
     
  7. MudGrrl

    MudGrrl AAAAH! Monkeys stole my math!

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    which dept are we going into?


    ladies lingerie?

    that's a good dept to go into.......
     
  8. jacksonpt

    jacksonpt Turbo Monkey

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    sorry, but taking out a loan for a bike is assinine (or however you spell it). No, not everyone is loaded, but most people buy the bike they can afford, or give up something else they want so they can buy the bike of their dreams. If you absolutely must have this bike, put it on a credit card, then transfer the balance over to a card with 0% interest on balance transfers... just make sure you pay it off in the time alotted. At least that way you get out of paying interest.
     
  9. johnbryanpeters

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    There's no such thing as cheap money. Save the cash first.
     
  10. binary visions

    binary visions The voice of reason

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    Personal loans tend to have pretty high interest rates, especially if you're young and without a lot of credit history.

    Frankly, I'd say if you can't afford the bike, don't buy it. When I bought my first really expensive bike, I gave the shop owner a deposit on it, and he put a "SOLD" sticker on the bike and set it on a shelf for me. I then paid it off over the course of a month and a half or so, and he allowed me to "test ride" the bike a few times while I was paying it off.

    You could try working out a loan through your parents/older siblings/etc. in order to avoid the interest, not to mention that falling behind to them means you get yelled at, but falling behind to the bank means damaged credit.
     
  11. laura

    laura DH_Laura

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    i agree. why would you put yourself in deBt if you didn't have to. there are necesities and there are luxuries, and putting yourself into debt for a luxury seems short sited.
     
  12. Wumpus

    Wumpus makes avatars better

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    There is know way I would take a loan out for the full price of a bike. If you can't come up with at least half upfront, I would say no way. That way if you lose your job or something, you can probably sell the bike off for enough to pay off the loan/credit card. Nothing wrong with trying to build a little credit, but wrecking it early in life sucks.
     
  13. AR_

    AR_ Monkey

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    Hehe :thumb:

    Don't do it man. As BV said, if you can't afford it, don't buy it. I've done this.. i've ended up on the bike i've always wanted, and i'm not in a penny of debt to anyone. Definately the way to go!
     
  14. -dustin

    -dustin boring

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    i just bought a bike i couldn't afford. was supposed to be a graduation present, but i found out this particular bike was no longer going to be made. i had been wanting one for 4yrs, and at the time, only 2 more were available in my size. so...i could either pass up a bike that i waited 4 years to get, or i could put it on a credit card and transfer the balance. i did the latter. 0% interest for a year, or something like that.

    i don't regret getting it, but because i had to pay for it 5 or 6 months ealier than expected, i had to shave off some costs on the bike (different specs, etc). i am also having to seriously cut my spending right now. add to that the ER visit i just had, and the DR's visit, and well, i don't consider myself to be in a particularly good situation.

    of course, all this would be alleviated if a freakin' bike shop would give a damn chance.
     
  15. DirtyDog

    DirtyDog Gang probed by the Golden Banana

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    There's nothing wrong with borrowing money. If this is the only debt you have then go for it. You'll have a new bike and you will be building your credit. Just don't plan on selling the bike and paying off the loan later on. The bike will depreciate in value much faster than you pay off the loan.
     
  16. DirtyDog

    DirtyDog Gang probed by the Golden Banana

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    A young person with no credit won't be getting 5.9% credit card offers.
     
  17. hilldown

    hilldown Chimp

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    I didnt think I spelled loan wrong? Anyway, thanks for the feedback everyone. I know alot of you are holding back, trying not to call me a dumba$$ for even thinking it up. But I have no other debt, and I am trying to build credit anyway. Maybe a credit card is the way to go? The other problem is Im not that young. Im 22 without a solid credit report. No matter, thanks for the input.
     
  18. -dustin

    -dustin boring

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    is there an age with %-age rates drop? i'm 23, and my score in in the A+/ excellent range, but i still can't get anything less than 10%. does age, yearly income, time at current address, etc affect it?

    hilldown, you spelled debt wrong.
     
  19. hilldown

    hilldown Chimp

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    You think you have a grasp on spelling, then... you post and find you dont. A little late for the edit button now, but I changed it anyway. :)
     
  20. TN

    TN Hey baby, want a hot dog?

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    ^lol!
     
  21. joelsman

    joelsman Turbo Monkey

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    I think it depends on how fast you can pay it off. if you can pay it off quickly(less than a year) then ok, but in 2 years you will likely want something else.
     
  22. Repack

    Repack Turbo Monkey

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    That was my first thought. You should figure out what you want to pay monthly for it and just put that money into a savings account. Then pay cash for it. Its a good to in general for figuring out how much debt you can handle. More so w/ car payments. I do not know what you experience with debt is but in general it seems very easy to rationalize about 50% more debt than yo can actually afford. I base my experience on a Pathfinder that I finished paying off at the beginning of the summer.
    I bought my first bikes working at a shop. About 80% of my paycheck would go towards bike debt. But that was when I was like 14 years old. As I got older I would do stuff like work spring break in exchange for a fork or other pricey item. One year when I did that I got a $2 bill in the mail form my boss. I didn't realize I had cut it that close with my hours. It was a good laugh at the time.
     
  23. bluebug32

    bluebug32 Asshat

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    You only live once, but what kind of life will it be if you're riding the bike and all you can think about is the debt you're in? Try to borrow from the family or check on Ebay in the meantime.

    And, good luck. I certainly know how you feel!
     
  24. Wumpus

    Wumpus makes avatars better

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    What you talking about? The riding season is just beginning.
     
  25. manimal

    manimal Ociffer Tackleberry

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    dude, if you ever have to use a credit card or take out a loan, other than a mortgage, than you're living outside of your means. rewind history about 40 years and ask your grandparents what they did if they really wanted something and didn't have the money......they didnt buy it or they worked their arse off and saved until they could afford it.

    i was an idiot and used a credit card and loans for things i WANTED but didn't NEED and now, 7 years later, we're still paying for it (although we're less than 5 months away from being debt free, down from $14k 9 months ago when we decided to get serious about paying off our debt). u can rationalize like the inbred did and say, "well...i have to get it now or else..." but remember, you're just rationalizing to make yourself believe you need something that you don't.

    here's a little breakdown

    let's say you get the bike for $4,000. you MIGHT be able to get a CC with that kind of limit, but if you can't afford the bike right out you probably won't have that kind of limit. so..you'll probably have to get a personal, or "signature" loan which will have a higher interest rate because you have nothing to offer as collateral. average APR for that type of loan is 21%.

    so....
    4000 X .21 X term of loan = total you pay

    4000 X .21 = 840 (that's the interest you'll pay each year of the loan)

    a modest loan term for that amount will probably be about 24 months. so, a rough estimate of the total amount you'll pay for that bike will be .......

    $5,680.00

    now, that's with a loan that has a set repayment term, use a credit card and just make the min payment and you'll pay well over $8k for that bike you just had to have.

    it's all about delayed gratification, a concept that our generation has completely neglected. "i've got to look successful before i really am successful".

    i hope you choose to wait or find an alternative way
     
  26. douglas

    douglas Chocolate Milk Doug

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    dont do it......get a used bike & save your money
     
  27. TreeSaw

    TreeSaw Mama Monkey

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    :stupid: There are some nice used bikes out there for a great price!
     
  28. seabass

    seabass Chimp

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    Total interest on the scenario you describe would be $933.02 not $1680.00.

    You are right though, loans suck. I try to let others pay me interest not vice versa, but like I said above, a small amount of debt is not the end of the world. You just have to use some discipline and not let it get out of control. I don't regret having financed a bike ten years ago. Cycling is my passion and at the time it was the only way I could have the bike I wanted. I would much rather pay a little interest on a bike than a car.
     
  29. JRB

    JRB Guest

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    I pay a lot of interest. I want to buy some things, but am trying to show restraint. If it's one loan, do it. Be careful. I could have a nice house for what we pay on cards. I have chosen to be stupid in the past.
     
  30. mack

    mack Turbo Monkey

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    Unless its a F-450 with a Power Stroke Diesel and a bass boat to tow behind it.

    But in order to do this, you must have a trailer home/queen and work construction. Otherwise, this is not allowed.
     
  31. SkaredShtles

    SkaredShtles I love NEWCASTLE and will ONLY drink NEWCASTLE!!!!

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    Learn from Dumbass ^^^^^^^^^^^^

    Don't do it.

    :p
     
  32. manimal

    manimal Ociffer Tackleberry

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    oops....you are absolutely correct. forgot the armortization rate :help:
     
  33. SkaredShtles

    SkaredShtles I love NEWCASTLE and will ONLY drink NEWCASTLE!!!!

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    It's still stupid to go into debt to buy a bike. :p
     
  34. sanjuro

    sanjuro Tube Smuggler

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    My last 3 bicycles I worked 6 days a week to pay for them. I would wait until I could afford something worthy rather than put it on credit or settle for something less.

    Ride what you have for now. I rode a 7 year old hardtail and a $600 road bike until I could afford what I wanted.
     
  35. hooples3

    hooples3 Fuggetaboutit!

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    Honestly... the worse decision I ever made was to buy a brand new GT LTS-1 when it first came out. I didnt have all the cash.. so I put $2700 on my credit card, then school came and more money went on the card... it took me 5 years to get that card back to zero, and probably like $13,000. Id say dont spend the money unless you have it
     
  36. JRB

    JRB Guest

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    Bear in mind, these are all opinions, and only you have the right answer. Good luck, whatever you choose.
     
  37. -dustin

    -dustin boring

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    well, so much for that. will be keeping the frame, but will be getting refunded for everything else. ER visit really ****ed over my plans. i'd rather have that paid off, and push back the bike, than have the ER bills sitting there.
     
  38. bikenweed

    bikenweed Turbo Monkey

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    Mountain bikes are stupid, buy a dirt bike instead! :)
     
  39. mobius

    mobius Turbo Monkey

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    Taking a loan or doing a payment plan or anything on a bike is retarded. Cause you will want a new bike in a year and still be paying for the current one.
     
  40. BigMike

    BigMike BrokenbikeMike

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    I have always saved for my bikes, and then bought them. Same thing with my Pathfinder. Cash is the new thing :cool:

    It really sucks saving money and not getting what you want when you want it, but it pays off in the end. I am REALLY bad with money, so I started a CD with some money to make sure that I wouldn't touch it.

    And on the Cash thing, apparantly when you say "cash," dealers think you mean a check, and when you pull 11 grand in cash out of your pocket, they are a little suprised :D