@Lel wrote:
I've never refinanced a car, but I'm going to go out on a limb and say that it's probably the same as refinancing a home loan - the original loan gets paid and closed, and a new account is opened in its place.
The paid-off loan doesn't disappear at refinance. You will retain your account history, and will be reflected in your average account age. The closed account should continue to be reported on your credit reports for 10 years.
The new loan will dilute your average age, will result in a new credit inquiry, and will represent a new account on your reports. However, if you stand to save a lot of money on interest, then it may still be a good move for you, particularly if you do not plan on seeking new credit shortly thereafter.
Just check you loan documents to make sure there isn't any prepayment penalty.
Thanks Lel,
That's about what I thought. I have to replace my other car this summer and I am going with my local bank. I will be able to refinance at less than 7% in July. My bank will do both the purchase and the refinance on 1 pull. So if I am going to have 2 new installment loans showing anyway I might as well keep the inquiries to a minimum.
The original finance was for 6 years. I will refinance for 5 years, so the net term will still be the same. I will put the difference in payments, about $58.00 per month, into the principal to shorten the loan even further.
Cheers!
CB
Message Edited by charliebrown1370 on 12-26-2009 07:21 AM
