Be careful of LS "Financing"

[chas0218]

So the wife and I signed on the line in January. The tractor has been great but not so much the finance company. When you get the "financing" it is a contract not a loan so when you want to pay down the principle they just apply it to your payments. So in reality you are still paying all of the interest just up front. We didn't know this nor did our dealer tell us it wasn't a loan but a contract. Not sure he even knows to be honest. We ended up getting a personal loan and paying off the "contract". I mean if you don't mind just paying your monthly payment every month until your term is done then you don't have anything to worry about. If you are like me and would like to pay off loans before then do anything you can to secure financing through another outlet.

Just some advice from a guy you don't know but doesn't like getting screwed.

 

[murphy1244]

So the wife and I signed on the line in January. The tractor has been great but not so much the finance company. When you get the "financing" it is a contract not a loan so when you want to pay down the principle they just apply it to your payments. So in reality you are still paying all of the interest just up front. We didn't know this nor did our dealer tell us it wasn't a loan but a contract. Not sure he even knows to be honest. We ended up getting a personal loan and paying off the "contract". I mean if you don't mind just paying your monthly payment every month until your term is done then you don't have anything to worry about. If you are like me and would like to pay off loans before then do anything you can to secure financing through another outlet.

Just some advice from a guy you don't know but doesn't like getting screwed.

Same as most car loans.

 

[chas0218]

Same as most car loans.

No it isn't, I can pay the principle down in a car loan not in this contract. A loan is a loan of money, what LS is doing isn't a loan it is a contract.

 

[Trillium Farm]

It actually IS a loan, not all loans allow for prepayment, it's all in the fine print. I'm in the same boat with Toyota financing, wanted to make a balloon payment on the principal, but it would not have reduced the interest shown on the loan, only the loan would have been paid sooner so for me there was no advantage and stayed with the loan.

 

[Trillium Farm]

No it isn't, I can pay the principle down in a car loan not in this contract. A loan is a loan of money, what LS is doing isn't a loan it is a contract.

I think you are confused, no disrespect meant. Any advance of money to be repaid IS A LOAN the amount of time and the rate of interest is a contract and the articles as laid out on the loan are the terms.

 

[Diggin It]

I'm not aware that LS does financing, at least not from corporate. Unless this is something new, they have the dealers arrange it. In my case, I got a variable rate that has dropped considerably lately and I can (and have) made 'Principle Only' payments.

 

[LS Tractor Owner]

Diggin it is correct. LS does not do any financing. All loans / financing is done through third parties, usually arranged by the dealer. When I purchased and financed a tractor from Colorado, the loan was through a credit union in Wyoming. When I purchased in Texas, the financing went through a national bank (which was offering special interest rates for equipment purchases).

I wouldn’t bash LS, but more of your dealer. They knew what the program / financing was.

 

[CobyRupert]

Diggin it is correct. LS does not do any financing. All loans / financing is done through third parties....

I wouldn’t bash LS, but more of your dealer. They knew what the program / financing was.

All signatories had the opportunity to know what the program / financing (”contract”) was.

 

[chas0218]

All signatories had the opportunity to know what the program / financing (”contract”) was.

Yes and no, when we asked about the financing we were told the conditions that weren't what the conditions were. So bad on us for trusting someone.

The contract was through Wells Fargo. We were told by Wells Fargo that this was not a loan because there was no collateral but is considered a contract. With car loan financing the collateral is the car. Either way Wells Fargo and their terms are asinine not allowing payments on principle. Our bank was a little taken back when we told them of this.

When it comes to any company you're only as good as the companies you're affiliated with.

 

[chas0218]

Diggin it is correct. LS does not do any financing. All loans / financing is done through third parties, usually arranged by the dealer. When I purchased and financed a tractor from Colorado, the loan was through a credit union in Wyoming. When I purchased in Texas, the financing went through a national bank (which was offering special interest rates for equipment purchases).

I wouldn’t bash LS, but more of your dealer. They knew what the program / financing was.

To be honest I'm not sure he understood it. He said he was able to pay off his tractor in a little over a year but probably also paid all of the interest for the whatever the length of loan he had.

 

[ruffdog]

Learning experience....it is a question to ask before signing.

 

[Gator6x4]

To be honest I'm not sure he understood it. He said he was able to pay off his tractor in a little over a year but probably also paid all of the interest for the whatever the length of loan he had.

One thing you need to ascertain is if the Original Loan Maker and the Carrier of the loan now both filed a UCC-1 Financing Statement with the sate of NY. NY State will provide copies under the Freedom of Information since they treat the UCC-1 Financing Statement as Public Records. Block # 4 of the form filed by the lender with the states lists what is provided as collateral for the loan. It will state in this block # 4 if the loan is a PERSONAL CONTRACT or the collateral is a LS Tractor, model# ____Serial#______.

Uniform Commercial Code Forms, NYS Dept. of State

 

[Supraman0614]

It is illegal for a loan servicing company that operates in New York State to refuse early payments. Who is the loan company you were dealing with?

 

[chas0218]

It is illegal for a loan servicing company that operates in New York State to refuse early payments. Who is the loan company you were dealing with?

Wells Fargo, they would allow early payment but not towards principle. If you mean towards principle I really wish I would have known this about a week ago before I went and got a new loan.

One thing you need to ascertain is if the Original Loan Maker and the Carrier of the loan now both filed a UCC-1 Financing Statement with the sate of NY. NY State will provide copies under the Freedom of Information since they treat the UCC-1 Financing Statement as Public Records. Block # 4 of the form filed by the lender with the states lists what is provided as collateral for the loan. It will state in this block # 4 if the loan is a PERSONAL CONTRACT or the collateral is a LS Tractor, model# ____Serial#______.

Uniform Commercial Code Forms, NYS Dept. of State

Man, wish I had this info about a week ago. Haha oh well love and learn.

 

[shooterdon]

The loan for my LS was spearheaded by my dealer with a local Credit Union. I needed a couple of months to transfer funds from my Canadian investments but paid it off without penalty. I made **** sure that would be the case by having a FTF meeting with the CU.

 

[polarred21]

I would say thanks to OP for the alert here. Sounds like something buried in the fine print.

From my MF dealer visits they use AGCO financing so situation is different, BUT we have discussed in detail the differences in:

0% financing - payment is low, basically all interest built in up front and no discounts for early payoff.

4.54% financing- payment is very close the same as 0% payment and early payoff will discount the interest.


I guess best way to know is to ask this specific question up front and I always do. Also make your own amortization schedule and have the banks agree with it when asking about early payoff.

If the dealer didn't know, I guess you know what bank not to deal with now right?:thumbsup:

 

[chas0218]

I would say thanks to OP for the alert here. Sounds like something buried in the fine print.

From my MF dealer visits they use AGCO financing so situation is different, BUT we have discussed in detail the differences in:

0% financing - payment is low, basically all interest built in up front and no discounts for early payoff.

4.54% financing- payment is very close the same as 0% payment and early payoff will discount the interest.


I guess best way to know is to ask this specific question up front and I always do. Also make your own amortization schedule and have the banks agree with it when asking about early payoff.

If the dealer didn't know, I guess you know what bank not to deal with now right?

Most definitely, our problem is that we have only ever worked with our credit union and have taken very good care of us. I guess we were just used to having someone that had our best interests at heart.

 

[4tillingdirt]

I would say thanks to OP for the alert here. Sounds like something buried in the fine print.

From my MF dealer visits they use AGCO financing so situation is different, BUT we have discussed in detail the differences in:

0% financing - payment is low, basically all interest built in up front and no discounts for early payoff.

4.54% financing- payment is very close the same as 0% payment and early payoff will discount the interest.


I guess best way to know is to ask this specific question up front and I always do. Also make your own amortization schedule and have the banks agree with it when asking about early payoff.

If the dealer didn't know, I guess you know what bank not to deal with now right?:thumbsup:

Maybe I am missing something on this but if you have 0% financing how is the interest built in up front?

 

[RSR]

It seems like most of the advice is, "make sure you ask up front." It seems like that's what the OP did, and got bad advice. It may not have been purposefully misleading, as much as an honest mistake by the dealer that wasn't even sure. It's hard to know.

For this reason, my approach on all legal contracts is, don't trust what others say. Read ALL the fine print yourself. If unsure, get legal advice that has your best interest in mind (i.e., not from the dealer).

 

[Birdhunter1]

I have asked that exact question on every loan I have ever taken, can I pay more each month and will it go to principle, the answer has always been yes.
Fast forward to our house loan three years ago, had a mortgage at that bank since my first house in 2005, sold the first one, built my new place, never had a late payment and always paid about $50 extra per month.

My wife started auto payments every two weeks, when I am paid, paying 1/2 of our mortgage each paycheck, 1/2 of the truck payment etc....

Our locally owned bank merged with another locally owned, now a big locally owned bank system. One day Walter calls me and tells me I am 3 months late on my mortgage, I ask my wife what is going on and she prints out a statement from our checking account showing what we've paid.

Walter and I go round and round over the phone, I call up the bank VP and chew his ear over it, he vows to look into it and call me.
Next day bank VP calls me, very apologetic, took care of situation of us being in late payment status, promises it was not reported to my credit score etc etc etc. In the conversation I mentioned if F___ B___ were still alive (he was a founder of this bank), Walter would be out of a job and not working in this part of the state again for the way he treated me. Which then changed the whole conversation when I mentioned F____ B____ was like a wise uncle to me and mentor in the personal investment and financial decisions I make.

The bank has since seen the wisdom of my wifes decision to pay a bit over half each paycheck and no longer messes with us.