Please advice,dell is charging me 26.99 % interest on monthly installments

Hi,
I recently ordered a ( XPS M1330) on monthly installments and they are charging me an annual rate of 26.9%.
I think this is steep. I wanted your opinion. If it is steep, how do I ask them to reduce it to something like 10 % to 15 %.

Regards,
Rajiv

 

You can't. That's how credit works, either pay it off, or take the interest. Welcome to the real world.

 

There is nothing illegal or wrong about it. The interest rate is stated in the terms of using the credit, terms that you agreed to when you bought the computer.

 

Dude you're borrowing money from Dell, of course their gonna charge you interest. Their not just gonna give you all this money for free. I mean there's 0% financing for cars, but this ain't that.

Also, you can just lower your interest rate, unless your refinance thru someone else. That number is largely based on your credit and if it's bad, you're gonna get a high rate.

And yes, in my opinion that is extremely high. I would never pay that much interest. If I really had to, I would go take out a personal loan from my bank and pay them 6-7% instead of the 26% Dell is offering.

 

Dell isn't offering. That's a very standard credit card interest rate.

This is partly why I advocate teaching finance in high school. Screw foreign language, make them pass a finance class so they don't screw themselves over in the future.

 

Sounds like you should have done your research first.

You don't ask financial question AFTER you sign the contract.

 

I like the laptop so I have to live with it. Yup, I researched all the technical details but not the financial part .

For the record, I still have to sign the document and fax it to finalize the sale. I thought I could ask them for a lower interest rate before finalizing the deal.

 

You can also ask them for a free laptop.

Why are you buying a laptop if you don't have the money to pay for it?

 

If you dare, find some counselling services to help you deal w/ Dell. But I would tell you that it's not Dell's fault in this case. If you think anything is wrong, you SHOULD NOT purchase your laptop.

 

This isn't a used car where you can haggle the cost. It is what it is. You don't like it, don't buy it. Dell is not gonna do you a favor by lowering your interest rate. What about everyone else?

 

got a job recently. the wages allow me to afford it but I wanted to pay monthly installments for a year and a half and then pay the remaining amount completely.

 

Dell does offer a 90 day no interest, sometimes. See if you can prepay before then to avoid the interest charges.

Warning: interest will still accrue from day 1, so if you pay on Day 95, you will still have accrued 95 days of interest to pay Dell, not 5.

 

got a job recently. the wages allow me to afford it but I wanted to pay monthly installments for a year and a half and then pay the remaining amount completely.

 

It shouldn't take more than a month or so to save up for a laptop. What's your credit score?

 

I dont know my credit score. I have a student loan of about 10k.

 

If you already owe that much money, borrowing more for a notebook at 26.9% is going to put you under a heavy load.

FWIW: Unless you need the new machine for school or work (an XPS?), I'd pass on this if I were you, until you're able to buy it outright.

 

You're the exact kind of person who's going to get into a ****load of trouble with money.

You may think that you're smarter and can manage yourself, but you can't. Don't buy this laptop. Watch your credit. Spend money wisely.

I may sound harsh, and I know you're not going to listen to me, but at least that sets me up for a "I told you so".

 

OUCH, that is brutally high.. 18% is even brutally high..

You can't change the rates though, sorry to say.. If it we're that easy, people wouldn't be in over their head with credit card bills . Although, your idea, is a very welcome dream to come true.

It all depends on your credit score. Me, I got my rate for 13%, I was hoping for 9%, but the way the representative talked, no one ever gets 9% unless they have a credit score/record that is well.. perfect.. What ever they may find perfect I guess..


Lithus, not many, maybe as far as even no one in the real world with a family and bills can afford to drop $1000-$4000 to a laptop without a sweat. Unless you're Bill Gates or someone of equal wealth.

Personally, I have the cash handy to pay off my laptop 10 times over and still have money (No, I'm not bragging or nothing, let me state my point before calling me a dick).

To be perfectly honest, I'd rather keep the money, and just dish out 40 bucks every month. You never know when hell can rain down on you, and you find yourself owing a ridiculous amount of money or loose everything by an act of god (flood, tornado etc).

Also, let's not forget, financing a machine, will raise you're credit score. Frankly, I find it more of a benefit for me then anything. Only trade off is you may pay more due to interest.

Everyone has their opinions, personally, I find it a great way to boost my credit, and keep the money handy encase the unknown ever happen.


Let the guy learn from his mistakes, if this is one of them. If he has a job, he should be fine. One foot in front of the other gets things done.

 

I totally agree with you. I mean, were not here to lecture one on ethics and ways to spend their money, (or what to take loans for), but for some constructive criticism, i would say cancel it and send it back. You can buy a cheaper laptop, but pay in full for it, and then save up later for a more expensive one if that is what you want. Keep working until you can afford it.

Hell, tons of students don't have any computer. Thats what computer labs are for.

 

That's part of my point. If you cannot come up with that kind of money in a few months, you shouldn't be buying a laptop on credit. That's just a bad idea and will get you into a heap of trouble.

 

true - BUT dropping $4k on a non-essential item (like a laptop) is pure stupidity if you have to pay 26% interest because of your bad credit.

again, this is harsh advice - but if you're going to have to pay that much interest, at least do it on a house (or other essential item to support your family/kids), not a luxury item like a laptop...

credit is great - for example, it's bloody hard to buy a house without taking out a mortgage - but be very wary of dropping thousands of dollars on luxury items.

 

I appreciate the advice from all you guys. I ll give it serious thought. I have been pretty miserly for the past 2 years AND working in computer labs all this while .

My hard work paid off and I got a good job. I thought finally I could treat myself to a nice laptop ( good looks and I wanted to program using the laptop in Java,Ruby etc since I am a software developer by profession, so the heavy specs). Plus, I was planning to use the laptop for 3-4 years.

Thanks a lot for your feedback. This site is well read and well maintained.

Regards,
vijar82

 

Sorry... in America you can't haggle the price... especially with corporate companies... You can order one from India if you like to haggle...

 

It's very simple, really. If you don't have the money, don't buy it. If you have the money, buy it. At once in full.

The ironic this about credit is that although it's super convenient to use, you almost never actually want to buy on credit. You should never spend more then you have unless you absolutely have to and buying a laptop doesn't count as an "absolutely have to".

 

I see your point.

But if you can afford to separate with 20-60 dollars a month, for 4 years, then you really have no reason not to go for it.

But at those rates! Screw that.. I can just imagine how much is interest..maybe 3/4 of the computers total price.. lmfao

Heres an idea, if you're parents have better credit, get them to buy it for you, and you pay for it, just have it under there name.

You might get better rates.


EDIT:
You mentioned you wanted to program in Ruby? Man.. That is VERY in demand, you can make money faster then you can blink your eyes if you know what you're doing. You can make that laptop pay for itself really, but you gotta get lower interest rates. Like I said see if you're parents or someone can help. at those rates you might as well hang yourself if you ever loose your current job.

 

I hope this doesn't mean payment through your DPA account because I bought my 1330 recently and am planning to pay it off monthly.

 

I did a calculation...dunno if its right...someone check my work its been a while since i was in economics. But i came up with if the laptop costed $1500 initially and a 27% apr, he would pay $100 a month for 1.5 years resulting in a $300 interest charge over all.

...So it would be $200 bucks a year to finance it...which is less than $20 a month. I guess that isn't too bad. But my math might be wrong.

 

Using the equations here, if the laptop costs $1500 and he payed $60 a month, it would take 37 months to pay it off and he would have payed $725.91 in interest. That's why you don't buy on credit.

 

Again, not worth it. Pay for it in full up front, or don't buy it.

I'm assuming you mean $100-400 in total interest paid...

 

Definitely not worth it. Too steep.

If he only had 100-400 dollars in interest, personally, it's ok, it'll be worth the credit increase he'll get.

Bottom line, here, don't settling for anything more then 16.99% and below.


Yes, 100-400 in TOTAL interest paid.

 

He(she) could put it on a credit card, it shouldn't be hard to get one that has 16.99% apr...or even one that is 0% for the first year.

 

I highly doubt that you will be able to ask them upfront to lower your interest rate. However I know that the retailer I work for finances their cards through Citibank and they have an introductory rate of 26.9 I think right now. At any rate they start so high because it allows them to qualify more people at the higher rate. Many times in order to keep customers using the card, after 6 months of regular, on time payments (assuming that you do not owe on other accounts) many retailers will raise your credit limit to entice you, or lower your interest rate. You can also call them and try to talk with them in a respectable manner showing them that you have shown responsibility in handling your case and you may be able to find someone in customer solutions who will be able to offer you a lower interest rate.

Does this really work, sometimes yes, sometimes no. It does ultimately depend upon your credit score and how you approach your accounts.

I would agree through personal experience that it is more rewarding to purchase an item outright rather than pay on credit.

Also beware that most 0% interest for one year offers are not truly 0% interest, they are actually deferred interest offers. Meaning that if you do not pay it off within the given time frame you will be charged the full amount of interest that would have accrued during that promotional period.

 

actually nizzy i believe that $1840.68 at the end of 1.5 years which is equal to $340.68 in interest
so that would make you wrong

 

A $1,594.86 computer, after tax, GST/HST and PST - on a 13.99% interest rate throughout a 48 month period, which is 4 years to slow people. Would be a $43.57 monthly payment. Which is about $496.50, in overall interest paid, which is a total of $2,091.36 after everything is said and done.

at 26.99%, which is double, you can bluntly, double most of the digits I've given above.

Now I clarified myself. Which I felt was necessary.

Yeah, drop this deal. Seek parental help, or help from other family or forget it. Almost $1000 in interest is outrageous. You wouldn't see any massive jump in a credit score to justify the money. You'd get a bigger bang for the buck with about half that interest. Don't ask me to explain because it's really complicated.

Think about it.. that's $1000 you can put to that $1600, You could likely buy a 1730 or something.. LOL

 

http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp

 

Why not take advantage of their promotional offer (no interest until January 2009 on XPS systems assuming you pay it off by then)? That's what I did. My laptop configured at $1650 and I have a $50/month payment. I actually do have the money to pay it off, but I'd rather keep it on hand for now until I graduate in May. Once I graduate, it will be the only debt I have to pay off (yay for no student loans!).

 

That offer is for qualifying customers only...my guess would be he/she has no credit so they probably wont give him/her that deal.

 

No student loans??? All the way through college with no loans! Damn, you're a very lucky guy, or a helluva wheeler-dealer! Great work.

@OP: This is the guy whose advice you should follow!

 

I was able to qualify with very little credit (not bad credit mind you, just not much). In fact, my APR is 26.24% (close to the OP's 26.99). But it's still possible he wouldn't qualify. Might try calling Customer Service and ask about it though.

 

Alright to answer Lithus: I and like most people are in a need form. This lappy is mostliely more than what I need for the meantime, but I have needs for gaming and some light mobile video work.

But I have a smart strategy to beat the interest game.

Understand this: If you did qualify for the 0% financing for 12 months under their "Preferred Account" you must understand that if you DO NOT pay IN FULL the ENTIRE ammount that you were initally charged for your lappy purchace, Dell reserves and WILL CHARGE YOU the FULL ammount of the interest of the laptop.

- Example: 1452.96 was what I was chraged for my lappy. If I do not pay the entire ammount. The interest rate that I was issued 26.7% will be added onto my account. $328.36 at the start of the 13th month will be added if there is ANY MONEY on the Preferred Account.

My strategy - Assuming that you cannot pay the amount in full in 12 months:
1) Pay a little more than the minimum or pay as much as possible till the 11th month. *Paying $60 - at the end of 11 months there will be in and around $800 remaining.

2) To avoid getting hit with the "deferred interest" (look at example) I am going to balence transfer the remaing ammount to one of my credit cards: ie AMEX.

Reason: I have an amex card that allows me to balence transfer any accounts with a 0%APR for the first 12months. After that I get a standard 2% interest rate charged for the balence that stays on the card for the remainder of its life.

There, simple, and easy, no sweat kids.

 

I don't think he was saying using credit is bad, its just bad in the way he is using it. Your way, on the other hand, is smart.

 

Hey Guys,
I finally made a decision. I have cancelled the order for the original XPS M1330 Config (costing 1770 CDN with tax). The config. was Intel 7500, 3 Gb RAM.

The XPS M1330 I have now ordered is costing 1340 CDN with tax. Config is Intel 5450, 1 GB RAM. I am going to buy RAM from NCIX or tigerdirect.ca and install it myself later.

And, I got my first pay check which will cover the cost comfortably. So I m paying by credit card.

Thanks for all the input.