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Thread: Financing a New Horn

  1. Financing a New Horn

    Hi all. I am a college music student wanting to purchase my first euphonium. I was looking to spend up to around $5,000, but I cannot pay it all at once. Does anyone know a place that will finance a euphonium for some monthly payments? This would make me a very happy camper.

    Thanks


  2. #2

    Financing a New Horn

    Short answer: JUST SAY NO!

    Longer answer: it almost never makes sense financially to finance a horn. Not only are the interest rates exorbitant (anywhere from 17-23%, compound interest), the resultant debt reduces your creditworthiness, which negatively affects your ability to secure favorable interest rates on student loans.

    Most major retailers (WWBW/Guitar Center/Music123/Music and Arts, Dillon, ProWinds, etc., and some manufacturers (Yamaha) offer vendor-limited credit cards serviced by one of the big card companies (GE Financial, Wells Fargo, HSBC, etc., with low teaser rates: typically no interest for 6-12 months.

    The primary point of these cards is to sucker you into paying a LOT more for your horn without realizing it (the interest on $5000 at 17% over 4 years works out to $1925.21; at 23%, the interest works out to $2,692.35).

    The secondary point is to get you to walk out with a horn regardless of whether or not you can afford it. It is one of many ways they try to get a horn into your hands no matter what. Some stores are aggressive in trying to get you to sign up for their store card or for such nightmare "deals" like this.

    The "gotcha" on these cards that if you either miss or are late on a payment (even if the late payment is not your fault), you will owe interest on the full amount of the purchase price, calculated retroactively to the date of purchase (read the fine print). And if you miss several payments, they may also repossess your horn.

    The ONLY circumstance in which it makes sense to finance a horn through a vendor-limited credit card is if you are in a position to pay off the entire balance IN FULL within the no-interest period.

    If you absolutely MUST--MUST, not want to--own your own horn and you absolutely CANNOT wait until you have the cash to buy it outright, it is almost always better to take out a personal loan than to finance with a credit card, especially if you're eligible for a student loan, and particularly if you can get a secured loan (no interest and no payments as long as you remain enrolled in an accredited program at least half time), but even an unsecured loan (interest starts to accrue immediately) is preferable by far, owing to the substantially lower interest rates.

    The bottom line is, wait until you can buy the horn outright. In the long run you will be much happier knowing that your horn cannot be repossessed and your credit line cannot be ruined.

  3. #3

    Financing a New Horn

    Which make & model are you interested in?

  4. #4

    Financing a New Horn

    Just to add to what pam said above...

    First, my family has purchased some stuff with those no-interest for X months deals. We've always managed to pay in full by the due date. However, see my next point:

    Second, these no-interest deals are still an activity on your credit report and reflect an obligation for the full amount (plus interest, even if you don't slip up in the end). In that sense, I'm not sure they are any different from a personal loan (except for the interest) or a payment plan from a music store. However, keep in mind that credit activity can negatively affect your credit report (even if you pay it off in time). And also keep in mind that some insurance companies and some potential employers look at credit history. My wife works in an insurance office, and they use credit scores. The worse your credit score, the more you could pay for auto insurance, for example. We should have know better, but the last time we took out one of the no-interest deals, we would up paying more for our car insurance for the next year because of the credit hit.

    Dave Werden (ASCAP)
    Euphonium Soloist, U.S. Coast Guard Band, retired
    Adams Artist (Adams E3)
    Alliance Mouthpiece (DC3)
    YouTube: dwerden
    Facebook: davewerden
    Twitter: davewerden
    Instagram: davewerdeneuphonium

  5. Financing a New Horn

    JTJ: I'm looking at a meinl weston 551 or Miraphone 1258A. Or any good deal I can find. haha

    Pam and Dave: Thanks for that advice. I wanted one of those "no payment for 12 month" deals, but if it's not a good idea, then maybe I will try to save up for one. I have some scholarship money and some extra student loan money that I can try to put into a savings account. If I stay responsible, I could probably get one within the next year. I guess I was just being impatient, but if I save up for it, I sure will appreciate it more.


  6. #6

    Financing a New Horn

    But if you are young and are establishing a credit history, obtaining credit and paying it off can improve your credit score. There are no absolutes in this, except pay on time -- no late payments.

    There should be some bargains in those horns.

  7. Financing a New Horn

    There are some used ones floating around (both the 551 and 1258) for 3,775. Those were the reason I posted this topic. I think I would go woth the miraphone because I've heard a LOT of people have intonation problems with the 551. I've played a 451 and it wasn't great.


  8. #8

    Financing a New Horn

    Originally posted by: JTJ But if you are young and are establishing a credit history, obtaining credit and paying it off can improve your credit score.
    Ah, good point, John! That is certainly a consideration for those with little/no credit history.

    Dave Werden (ASCAP)
    Euphonium Soloist, U.S. Coast Guard Band, retired
    Adams Artist (Adams E3)
    Alliance Mouthpiece (DC3)
    YouTube: dwerden
    Facebook: davewerden
    Twitter: davewerden
    Instagram: davewerdeneuphonium

  9. #9

    Financing a New Horn

    Originally posted by: DerekMinich
    I have some scholarship money and some extra student loan money that I can try to put into a savings account.
    Cash is King, and in the long run, you're better off without the debt, but ...

    it might be worth sitting down and talking things over with your academic advisor and dept. head. If one (or both) will provide a letter stating the importance of owning your own instrument, you can include the cost of the instrument in the cost of your education. In that case, file an amended FAFSA with your school's Financial Aid Office, which should trigger a corresponding increase the amount you can borrow under a Stafford Loan.

    ----- off topic -----

    Not that you asked, so take this for what it's worth (not much), but ... although I stand firmly within the "try everything and use what works for you" camp, if I were your advisor, I would at least attempt to steer you toward a more "mainstream" model (Sovereign/Prestige, 642/842, 2900/2950, 5050) than a 551 or 1258, unless the 551 or 1258 was clearly a better fit for your playing and helped you attain the "sound in your head" more easily than the alternatives, if for no other reason than the demand for used "mainstream" models is significantly higher than the demand for non-mainstream models, so you are likely to recoup a greater percentage of your investment if/when the time comes to sell the horn, either because your career plans change or you decide to switch to another model.

  10. Financing a New Horn

    I had no idea that I could do that. It is definately an option I will pursue. Because, hopefully, this would be the only student loan i would have to take out. I really wish I could find a place to try these horns out. :/ I've played on a prestigue and they are phenominal (but very expensive). Maybe investin in a besson sovereign is the way to go. I can get a used one for around 4,700. Definately something to think about.


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