Question about car loans and refinancing

[SaigonK]

So since I am going through my divorce, i thought I should refinance my car that i have been paying to much on over the last three years.

My balance I owe is $5200 my interest rate is 13% so i pay about 230 a month.
My local bank can refinance for me at a better rate, it looks to be about 7-8% for a 24 month term.

I took the original loan for 60 months and i have 25 months left on the original.
So this refinance wouldnt add time to my loan, I obviously want to avoid adding time to the loan since there is only two years left on it. My thoughts are, will dropping 5% save that much cash? Is it really worth it?

Or is it better to make a two or three extra payment between now and the end of the loan to kill it off early? If I were to make a double payment with $230 going towards the principle say three times, how much woudl this really help out?

 

[Zim Hosein]

Where's RossMAN when you need him!

 

[SaigonK]

Originally posted by: Zim Hosein
Where's RossMAN when you need him!

Yeah! Where the hell is he?

 

[Vic]

Hmm... 24 months on $5,200 at 7% is.... $232.82/mo. No savings.

I backed in your current payment of $230/mo at 13% for 60 months and got an original loan amount of about $10,100 (give or take a little, you did say that payment of $230 was "about"). I think the issue is that you have already paid roughly $2,900 of the roughly $3,600 in total interest that is due on the loan over the full term.

 

[RossMAN]

Originally posted by: SaigonK

Originally posted by: Zim Hosein
Where's RossMAN when you need him!

Yeah! Where the hell is he?

No worries, Vic beat me to it and is way more qualified.

I haven't approved or declined a loan since 1998

 

[mdcrab]

If possible don't go to a bank. If you are eligible to join a credit union, check their rates. Usually they are hard to beat.
The credit union I go to has a 3.95 on new 36 mos, and 4.95 on used 36, 48 or 60 mos loans.

mdcrab

 

[SaigonK]

Originally posted by: mdcrab
If possible don't go to a bank. If you are eligible to join a credit union, check their rates. Usually they are hard to beat. The credit union I go to has a 3.95 on new 36 mos, and 4.95 on used 36, 48 or 60 mos loans. mdcrab

I am going to go to a credit union, but i just wasnt sure if it was really worth it to refinance for the last two years of the loan or if it is better to pay a couple payments on the prinicpal of the loan and end it early.
I was not sure how much, if any, money i would save on my onthly payment and or overall...


Looks like going with a couple extra payments is the way to do it, unless my bank can refinance at 2-3% or less.

 

[RossMAN]

Originally posted by: SaigonK

Originally posted by: mdcrab
If possible don't go to a bank. If you are eligible to join a credit union, check their rates. Usually they are hard to beat. The credit union I go to has a 3.95 on new 36 mos, and 4.95 on used 36, 48 or 60 mos loans. mdcrab

I am going to go to a credit union, but i just wasnt sure if it was really worth it to refinance for the last two years of the loan or if it is better to pay a couple payments on the prinicpal of the loan and end it early.
I was not sure how much, if any, money i would save on my onthly payment and or overall...


Looks like going with a couple extra payments is the way to do it, unless my bank can refinance at 2-3% or less.

Agreed.

 

[iamwiz82]

Originally posted by: SaigonK

Originally posted by: mdcrab
If possible don't go to a bank. If you are eligible to join a credit union, check their rates. Usually they are hard to beat. The credit union I go to has a 3.95 on new 36 mos, and 4.95 on used 36, 48 or 60 mos loans. mdcrab

I am going to go to a credit union, but i just wasnt sure if it was really worth it to refinance for the last two years of the loan or if it is better to pay a couple payments on the prinicpal of the loan and end it early.
I was not sure how much, if any, money i would save on my onthly payment and or overall...


Looks like going with a couple extra payments is the way to do it, unless my bank can refinance at 2-3% or less.

My CU is offering 2.99% APR for 24 month auto loans with a minimum of $5000.

 

[RossMAN]

iamwiz82 - That's a great rate for a short term re-fi.

Is that on new or used auto or both?

 

[WHipLAsh13]

Originally posted by: SaigonK

Originally posted by: mdcrab
If possible don't go to a bank. If you are eligible to join a credit union, check their rates. Usually they are hard to beat. The credit union I go to has a 3.95 on new 36 mos, and 4.95 on used 36, 48 or 60 mos loans. mdcrab

I am going to go to a credit union, but i just wasnt sure if it was really worth it to refinance for the last two years of the loan or if it is better to pay a couple payments on the prinicpal of the loan and end it early.
I was not sure how much, if any, money i would save on my onthly payment and or overall...


Looks like going with a couple extra payments is the way to do it, unless my bank can refinance at 2-3% or less.

I was in the similar situation 2 years ago. I did all the math and since all the interest you pay is usually in the first 2 years of the loan it payed to just keep the existing loan and make a couple of extra payments.

 

[iamwiz82]

Originally posted by: RossMAN
iamwiz82 - That's a great rate for a short term re-fi.

Is that on new or used auto or both?

Either, I believe. They are marketing it as a refinance tool, though.

(My CU) is heating things up with some really hot new Auto loan rates! This is a great time to think about refinancing your auto loan that you got from another lender. Chances are you are paying a higher rate than we are offering. Refinancing that loan with (My CU) can save you money on monthly payments.

This is good until April 30.

 

[Rumpltzer]

For future reference, there are lots of free loan rate calculators here.