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Are you trying to save money from your monthly payment, or are you interested in saving money in interest? If you can get a refinance loan for longer than your current term, then you'll pay less each month but you'll pay more interest in the long run. There's not much point in refinancing for a shorter term since you can just do that yourself by paying more against the principle each month.
Well, I'm trying to do both. Lower monthly payments as well as save on interest.
I think I may have waited too long to try and refinance. I'm not willing to add more years on to the loan just to have a cheaper montly payment. Just like you said, I will be paying more interest in the long run.
I think it's best for me just to keep the loan and try to pay it off early to avoid the rest of the interest.
Well, I'm trying to do both. Lower monthly payments as well as save on interest.
I think I may have waited too long to try and refinance. I'm not willing to add more years on to the loan just to have a cheaper montly payment. Just like you said, I will be paying more interest in the long run.
I think it's best for me just to keep the loan and try to pay it off early to avoid the rest of the interest.
But just pay what you are paying as your current payment then. For example on a house if you get a 30 year loan vs. a 15 year loan, you can pay the 15 year loan payment amount on the 30 year loan and it'll be paid off in...wait for it...15 years. As long as there is no pre-payment penalty there is no negative to refi-ing at a long term but keep making the payment you were making.
OP, you never said what the costs to refinance are - if you can refinance at little or no cost, and get a better interest rate, I would do that, even if the payout date for the loan were pushed out in time - here's why - most credit union car loans have no pre-payment penalty - so you can go on and pay the same or more that you are paying now, with the option to pay less if you need it.
Some people have self-dicipline problems and won't pay more than they have to, also check and verify that the refi you are offered really does not have any pre-payment penalty.
Lower interest is always better, it may or may not make your refinance cost back for you in a reasonable time frame though.
Yellabone: Did you ask Security Service if they do refinancing? Any bank loves repeat business! Yes, they are losing out on the interest you pay overall for the life of the loan but they want to hook you as a long term customer!
I purchased a 2007 Honda Accord brand new in 2007. Loan amount was a little over $20,000 for 75 months at 6.7%(Credit Score 690). I had just purchased a new home in 2006 at that time so my credit score took a little hit at the time I purchased my car. Monthly payments are $337.46.
Anyway, the interest rates are much better(3.2-3.7%) and credit score is 716. I have a little over 3 years left to pay off the car. I'm with Security Service Federal Credit Union. Is it worth refinancing?
Thanks in advance.
Can you refi? I doubt your car is worth $14,000, so you won't be able to refi in that case--you owe more than the car is worth according to the lender in question.
Nor can you stretch a refi on a three year old car out beyond 48 months on a used car and most lenders are around 6.5% for used as well. Then there is teh issue of you buying a house and that jacking up your debt to income ratio. If a $337/month payment is too much, I doubt you get a refi loan.
Did not see that brought up yet.
You have to dump this car. Find a private buyer and have the lender cut a deal with you to pay off the leftover balance and let the buyer's lender get a hold of the title.
Id refinance it, and pay as much as possible towards it (as close to your normal payment as possible)
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