Pentagon Federal Credit Says No Smart Financing?

[Fredvon4]

John... there may be tax concerns with with some 401s like Roth...

I used to have a traditional managed 401 from a previous employer that we borrowed from several times... no tax impact coming out or going back in---but we did loose potential compounded interest... In our case, short term shallow borrowing did not impact it so much as to be a big loss...and using other savings or borrowing on credit would have cost a bit more...

Fed Gvmt Employee TSP "G" fund does not track near term market forces... I think it is based on 30 year T notes.... low risk non volatile low yield

A loan to my self is from not taxed going in from my wages (pre tax contributions) ( and I enjoy a OK 3% employer matching contribution)---coming out to me as loan, does not increase my annual reportable income. And going back in, must be paid out of my wages but not pre tax and no matching gain. So coming out and going back in it is transparent to the IRS...no reporting required as long as it gets back in ...If for some reason I loose my job and can not get the loan repaind, then yes, I pay a 10% penalty for early disbursement and must report the remainder of the loan as annual income

In theThrift Saving Plan we have many fund choices... Most of them track the ups and downs of the market. However, G fund is fixed very low risk very low yield... and TSP rules only let you only borrow from your TSP less then 100% (I think 80% max) of what you have in G fund...

Now if all my TSP was in the riskier higher potential yield funds you are correct... $30K at 15% borrowed and paid back at 4% is a net loss of 11%. And in that case, borrowing commercially 8,9,10% would still give a net gain.

The quotes 3.5% to 5.6% loans, if eligible, are a real good deal...

I qualify for the USAA 4.89% and cost free GAP insurance--- I must use USAA as the auto insurer, (no sweat got it) and allow auto loan payment from saving or checking.

I am considering using USAA for the auto loan just to get the free GAP insurance and pay it out in 90-120 days with a TSP loan.

My dad taught me to be diversified and always have some stable safe relatively liquid assets.. TSP G fund is that... my distribution of contributions always has some % going into the low risk assets... wink

[rwcmick]

Originally Posted by Beth in L.A.

Hi there.........

I'm with Kaiser. It used to be Kaiser Credit Union, but now it's called Kaiser Federal Bank. I'm not certain of the why's for the change and I do not think you have to be a Kaiser employee to join, but again, not sure.

They told me the moment they pulled up my account to let the dealer know that I am pre-approved for purchase. She said I had an excellant Deacon (or was it Beacon?) score........whatever, I've got nice credit.

I've worked for Kaiser for 34 years and always had my accounts with them and used direct deposit and payroll deduction so I'm sure they know I'm a good bet.....

Beth

Beth,

Thanks for the info. Looks like Kaiser members are eligible as well! I'll check with my local branch and see what their rates are.

[Beth in L.A.]

Originally Posted by rwcmick

Beth,

Thanks for the info. Looks like Kaiser members are eligible as well! I'll check with my local branch and see what their rates are.

Excellent!!

Beth

[rwcmick]

This just in. PEN FED WILL FINANCE SMARTS!!! The decision has just been made that financing will be available for our cars! According to LeAnne, there will be some "restrictions" on the amount financed, so they might not do a 100% LTV, but great news all the same.

[Vlad92]

Great news indeed!!! Now if they just drop their rates come the first of the month (as they usually do after a Fed rate cut) all will be good. I'd be curious then on the % LTV thing. I'm going to write my check for the full amount of the purchase. Are they saying then they will only pay a portion of that and I'll be stuck with the rest? (again, the check says financing up to 100% of MSRP right on it)

[rwcmick]

all LeAnne said is that there will be restrictions on the amount that they can finance. i'm not sure if that means that they'll only finance x amount or % of the value of the car.

[Vlad92]

Just to close out this discussion, my Pen Fed loan cleared today with no restrictions. Now if they would have only dropped their rates (the 4.99% didn't change after the Fed Rate cuts last month). Other then that all is good!