Do you know what most fire departments do to themselves that causes the most harm and wasted money when they finance their new truck? They fail to be completely honest with the bank.
Stop shooting yourself in the foot.
Most departments feel that the bank is the opponent and they withhold critical information in their bank discussions. For example, if the department plans on paying off their new truck in 3 years, they ask for a 5 year term and they never mention the 3 year plans. So, the department pays off the loan in 3 years and gets hit with a penalty or higher interest.
You gotta be honest or you'll get caught
If you don't feel that you can be 100% honest with the bank you're talking to, go find another bank. Then, disclose your entire financial plans and listen to the bank's advice. Just as you wouldn't hold back information from a doctor trying to help you, you shouldn't hold back information from your bank.
If the bank above had known the department would pay off the loan in 3 years, they could have offered an idea that did not include a penalty. And saved the department money and grief.
Summary
When you borrow money, you are entering into a long-term relationship. All successful relationships are built on a foundation of trust and honesty. Don't hold back any information! Tell the bank the whole truth and let them use their knowledge to help you.
Stay safe!
John R. Hill
Apparatus Budgeting Consultant
ENVIZION Financial
www.envizionfire.com
Wednesday, February 25, 2009
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