Moron doesn't understand how refinancing a loan works

29  2018-05-30 by UmbellateSaxhorn

12 comments

Avoid parenthetical insults—they just diminish your authority. Throughout the post, you're best points seem to be lost in a sea of self-aggrandizement and scattershot thinking

Snapshots:

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I don’t either tbh. Dinosaurs 🦖 don’t need loans

Gay space lizard communism? Sign me the fuck up.

Bookmarked. Now anytime I feel bad because I'm a retard who can't admit he's wrong, I can look to this thread and feel less retarded, and more brave. It will serve as a roadmap: what not to be.

And yet here you sit, still posting in /r/drama.

I mean, I have to maintain a certain level of delusion to keep things from collapsing. ;_;

wow. now THAT guy is a fucking idiot

I think people aren't understanding him or he really is clueless. When you refinance, you do actually take out another loan but it's to pay off the first one and then you now have a new loan at a lower interest rate.

edit: ok, I see his other comments arguing. I guess he does think it's an additional loan and the other one stays active.

If you get a personal loan like from a lender not your bank (lending club for instance), then you do actually get the cash and then you have to be responsible and pay off the original loan.

I think the guy thinks that in order to pay off the original loan you have to pay the principle plus all future interest (he also appears to think "principle" means the base amount of the loan plus all interest). So he doesn't understand how one bank could undercut another with a lower interest rate because he thinks they would have to pay all that higher future interest anyway. He therefore dosen't understand how a refi could ever be good for the consumer.

Basically he dosn't get that if you pay off a loan early you don't owe the lender the interest that would have accrued if you followed the standard repayment plan.

Is that what I'm missing? I was trying to understand where he was coming from because his original post sounded fine. You do take out another loan but it replaces the old one. Then I read his other comments and I wasn't sure what he was trying to say although I could tell that he thought the bank didn't make any money and I wasn't sure what he was getting at.

The fact that he thinks its impossible for a second bank to make money bye refinancing your loan at a lower interest rate and that fact that he thinks the term "principle" means the principle + all interest, makes me believe that it what he is missing.

Like 50% of Americans are so ignorant about finance they couldn't tell you why contributing to a 401k is a better option for your retirement than just dumping money into a coffee can. Another 25% would just say "because stocks or something."

This kind of shit is how we get people retiring with $1000 in savings.