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Is Refinancing is a good thing?

M

Mayfriday0529

Diamond Member
The Dealer where got my Car Nissan called me up and said I?m paying to much interest for it and very high month payments, and said they could help me lower it.

So I called them to talk about it and said they could try refinancing for a lower rate with another bank.

I never done this before and originally my interest was so high a year ago when I got it because I have to much debt with school loans and of course some credit cards. its been a year now and well my school loans are still up there but always paying on time and my credit card debt has been reduce a lot, always paying on time and not using it for anything.

So Refinancing good or not good?
 
if there is no upfront cost, then it is a no brainer. Otherwise, you'll have to do some math.
 
1. Do you plan on keeping the car for another 24, 36, 48 months? Whatever you refinance it to?

2. Figure out how much interest you will end up paying at your current term and APR and compare it to how much you'll be saving by dragging out a lower APR over more months.
 
Originally posted by: Mwilding
if there is no upfront cost, then it is a no brainer. Otherwise, you'll have to do some math.
Click to expand...

I dont know i have an appointment on saturday. do they usually do unfront cost, is it alot?
 
Originally posted by: Red
1. Do you plan on keeping the car for another 24, 36, 48 months? Whatever you refinance it to?

2. Figure out how much interest you will end up paying at your current term and APR and compare it to how much you'll be saving by dragging out a lower APR over more months.
Click to expand...

I finance the car its not a lease i'm into my first year.

i guess i have to figure out the interest and stuff
 
Originally posted by: Jnetty99
Originally posted by: Red
1. Do you plan on keeping the car for another 24, 36, 48 months? Whatever you refinance it to?

2. Figure out how much interest you will end up paying at your current term and APR and compare it to how much you'll be saving by dragging out a lower APR over more months.
Click to expand...

I finance the car its not a lease i'm into my first year.

i guess i have to figure out the interest and stuff
Click to expand...

I guess you do. :roll:
 
get a financial calculator and figure out how to use it, or bring a notebook computer and find a web calculator or use excel.
 
Figure out what the rate is on your current loan, and call and ask them what rate they wanted you to refinance with. It's quite simple.
 
Originally posted by: Jumpem
Figure out what the rate is on your current loan, and call and ask them what rate they wanted you to refinance with. It's quite simple.
Click to expand...

They didnt say much just made an appointment to talk about it saturday, but i dont want them to run a credit check if i dont like there options.
 
Might be good, might not.

First thing that occurs to me is: Why does the dealer care? Answer: they will somehow be making some money out of this. So I would already be skeptical.

Two main things you need to compare: APR (Annual Percentage Rate), and term of the loan.

Take your current monthly payment and multiply it by the number of payments left. That's how much you'll end up spending if you stay with what you have now. Then look at their proposal and see what the total of payments is. That lets you compare the total dollars each loan will cost you.

Then make sure they aren't simply lowering your monthly payment by taking what you owe and spreading it out over a longer term. That's an easy way of making it look like a good deal when you could end up spending much more.

Very many people only look at monthly payment and never consider the total cost of the loan. That's how dealers stick people with seven-year car loans (of course, they'll never call it "seven years" - they'll say "84 months" which sounds shorter) that they can't get out of for years.
 
Jerry,

Do yourself a favor and check out a local credit union.

American Honda Finance approved our 2002 Honda Accord loan ($17k) at 10.50% I took it because I knew after 1 year of making on time payments I could refinance at a lower rate.

After 1 year, I re-fi'd with a local CU at 4.75% and we also shortened the length of our loan.
 
I did this last summer. Was a no-brainer for me ... there were no costs involved other then a notary fee. I don't recall how much the interest rate changed, but I didn't extend the term, and my monthly payment went down by about $20. Not huge, but all it cost me was some paperwork.

But like somebody else said ... why does the dealer care? Because they stand to make some money on the deal, which likely means it's not a good deal for you. Figure out your total cost over the remaining life of the loan for what you have now, and their deal. Include any refi costs, and do it yourself so you understand what's going on.
 
Originally posted by: RossMAN
Jerry,

Do yourself a favor and check out a local credit union.

American Honda Finance approved our 2002 Honda Accord loan ($17k) at 10.50% I took it because I knew after 1 year of making on time payments I could refinance at a lower rate.

After 1 year, I re-fi'd with a local CU at 4.75% and we also shortened the length of our loan.
Click to expand...

Thanks Rossman i will look into it.

here are some specs for you guys on my current loan. By the way be nice, i know its a bad deal but it was the only one i could get at the time.

Finance 12,789.50
60 months at 12.04%
Montly payment 284.75
According to a Finance Calculator Total payments will be 17,084.65
Total Interest paid 4,295.65 after 60 months

Total Interest paid already 1,317.15
 
Originally posted by: iamwiz82
holy christ, 12% on a car? :Q
Click to expand...

No one wanted to give me the loan, they tried several banks, but with all my school loans and some credit cards max out to pay school at the time thats what they came up and i needed a car since the one i had got totalled in a car accident.
 
Originally posted by: Jnetty99
Originally posted by: iamwiz82
holy christ, 12% on a car? :Q
Click to expand...

No one wanted to give me the loan, they tried several banks, but with all my school loans and some credit cards max out to pay school at the time thats what they came up and i needed a car since the one i had got totalled in a car accident.
Click to expand...

I have close to $40k in student loans and they continue to ile up and i still had no problem getting good rates. Something else is wrong with your credit, unless you have none at all. I'd run a credit report if I were you.
 
Originally posted by: iamwiz82
Originally posted by: Jnetty99
Originally posted by: iamwiz82
holy christ, 12% on a car? :Q
Click to expand...

No one wanted to give me the loan, they tried several banks, but with all my school loans and some credit cards max out to pay school at the time thats what they came up and i needed a car since the one i had got totalled in a car accident.
Click to expand...

I have close to $40k in student loans and they continue to ile up and i still had no problem getting good rates. Something else is wrong with your credit, unless you have none at all. I'd run a credit report if I were you.
Click to expand...

i ran my equifax report twice and everything is paid on time, no outstanding items, i dont know.
 
Originally posted by: Jnetty99
Originally posted by: iamwiz82
Originally posted by: Jnetty99
Originally posted by: iamwiz82
holy christ, 12% on a car? :Q
Click to expand...

No one wanted to give me the loan, they tried several banks, but with all my school loans and some credit cards max out to pay school at the time thats what they came up and i needed a car since the one i had got totalled in a car accident.
Click to expand...

I have close to $40k in student loans and they continue to ile up and i still had no problem getting good rates. Something else is wrong with your credit, unless you have none at all. I'd run a credit report if I were you.
Click to expand...

i ran my equifax report twice and everything is paid on time, no outstanding items, i dont know.
Click to expand...

It could be one of many factors

Length of established credit
Length of employment
DSR (debt to income ratio)
LTV (loan to value)

I'm sure that if you have made at least 1 year of ON TIME payments with your current loan, that should count for something.

Also what I like about small personal CU's is humans decide your loan rather than a computer (which most larger banks use to spit out a decision).

Our credit is good, I was worried that they would decline us but we were approved at a good rate.

Credit Unions rock!
 
DSR (debt to income ratio)
i think that was one main factor.

Hey question about the local credit union, my mom is about to end her lease can you get pre-approve by a local credit union before going to a dealer so you know how much money you have to play with?
 
Originally posted by: Jnetty99
DSR (debt to income ratio)
i think that was one main factor.

Hey question about the local credit union, my mom is about to end her lease can you get pre-approve by a local credit union before going to a dealer so you know how much money you have to play with?
Click to expand...

Yes.

I would also advise that you and your mother read CarBuyingTips.com and Edmunds.com for excellent car buying advice.
 
Thank you all for the information i'm calling that women at the dealership now and cancelling that appointment.

I was not even thinking of refinancing my car loan but with all this new information hell yeah!
 
You should keep all your options open, so I wouldn't cancel your dealer appt (maybe reschedule it).

If you apply at a credit union or two, you should have a decision within 24 hours.
 
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