Thursday, February 21, 2008

Adjusted Net Worth due to Mistake on Car Loan

Today I adjusted my net worth on NetWorthIQ because of an error on my fiances car loan. We found out last night that she has a balloon payment due at the end of her loan which she did not know about. I thought something seemed wierd with her loan but since it was something she acquired a couple years before meeting me I did not pay too much attention and look into it. However, her credit report showed a balance of about 5k more then we thought it should be. So after looking into it I found out she took out a balloon loan which would require a balloon payment at the end of 4 years of about 5k. This really sucks. I had thought her car would be completely paid off about a year and two months from now with just the monthly payments. Instead we have to fork over another 5k at that time. This loan seems like a big waste of money. I am not sure why her father funded the car this way instead of just a typical 4 or 5 year loan.

Anyways, I went in and adjusted the car loan for the two months our finances have been joined by 5k. So now our networth is 5k lower then we originally thought. This puts us just over 18k net worth. Hopefully we can cross the 20k mark either this month or next with our savings and debt repayment.

A lesson is to be learned here. When financing a loan for anything, make sure you understand the terms if you are going to put your signature on the contract. My fiance had no idea about this balloon payment which really frustrates me. She is frustrated as well because she has become a lot more financially aware since we started dating and became engaged. She is mad that she now has to shell out 5k at the end of her loan after she's been paying on it for 4 years already. I agree and I know this frustrates her because she is actually more of a money saver them me and really will not like seeing our savings go down by that much.

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