Reply
Valued Contributor
Posts: 2,110
Registered: ‎12-29-2011
0

Should I refinance?

I owe about 9,200 on my 2011 Hyundai Accent. The loan originated at 12k about a year ago. I have about 40k miles on the car so far. My interest rate is relatively low (4.99%) and I pay around 227 a month. I was looking to lower my payments and term (currently 60 months). Would it be ideal to refinance this loan this late in the game? Or should I just continue making my regular payments? I'm looking to refinance with Chase. They are offering 2.54%

The truth is out there...
FICO scores: 764 (EQ) 732 (EX) 757 (TU) 9/14 | Goal score: 750+ (all 3)
Tradelines: Capital One QS NPSL (5.0k) | Discover IT (6.0k) | Walmart Mastercard (5.0k) | Chase Freedom NPSL (7.3k) | Citi Simplicity (9.3k)






Moderator Emeritus
Posts: 12,462
Registered: ‎12-30-2011
0

Re: Should I refinance?

[ Edited ]

maiden_girl wrote:

I owe about 9,200 on my 2011 Hyundai Accent. The loan originated at 12k about a year ago. I have about 40k miles on the car so far. My interest rate is relatively low (4.99%) and I pay around 227 a month. I was looking to lower my payments and term (currently 60 months). Would it be ideal to refinance this loan this late in the game? Or should I just continue making my regular payments? I'm looking to refinance with Chase. They are offering 2.54%


Lowering payments and term are at odds generally; if you opted for a 4 year loan at that APR you're looking at 202ish/month.

 

I wouldn't refinance for 25/month but that's me and your economic and credit situation may be different.  If I had to do it over again and I didn't have a theoretical mortgage coming up, I'd refinance my vehicle for a *longer* term rather than a shorter one, and play silly FICO games. 

 

Alternatively, if I wanted to just be done with it as it sounds like you do, I'd refinance for the lowest APR on the longest term possible (which typically will result in the lowest payment with virtually any lender), and just kick extra to the loan each month thereby reducing my principal by the largest amount each month... that presumes I have a fixed budget payment my car loan.  If at the same APR it doesn't matter (other than I have flexibility to submit a smaller payment if I need to put that extra somewhere else in a given month) but a lot of lenders will discount a 72 month loan for whatever reason, and if they do this, making the 48 month payment on a 72 month loan will save money as an example.

 

 

 

Starting Score: EQ 04 561, TU 98 567, EX 98 599 (12/30/11)
Current Score: EQ 04 700, TU 04 731, EX 98 725 (05/24/15)
Goal Score: 700 on EQ 04 (01/01/16)


Take the myFICO Fitness Challenge
Valued Contributor
Posts: 2,110
Registered: ‎12-29-2011
0

Re: Should I refinance?

[ Edited ]

Revelate wrote:

maiden_girl wrote:

I owe about 9,200 on my 2011 Hyundai Accent. The loan originated at 12k about a year ago. I have about 40k miles on the car so far. My interest rate is relatively low (4.99%) and I pay around 227 a month. I was looking to lower my payments and term (currently 60 months). Would it be ideal to refinance this loan this late in the game? Or should I just continue making my regular payments? I'm looking to refinance with Chase. They are offering 2.54%


Lowering payments and term are at odds generally; if you opted for a 4 year loan at that APR you're looking at 202ish/month.

 

I wouldn't refinance for 25/month but that's me and your economic and credit situation may be different.  If I had to do it over again and I didn't have a theoretical mortgage coming up, I'd refinance my vehicle for a *longer* term rather than a shorter one, and play silly FICO games. 

 

Alternatively, if I wanted to just be done with it as it sounds like you do, I'd refinance for the lowest APR on the longest term possible (which typically will result in the lowest payment with virtually any lender), and just kick extra to the loan each month thereby reducing my principal by the largest amount each month... that presumes I have a fixed budget payment my car loan.  If at the same APR it doesn't matter (other than I have flexibility to submit a smaller payment if I need to put that extra somewhere else in a given month) but a lot of lenders will discount a 72 month loan for whatever reason, and if they do this, making the 48 month payment on a 72 month loan will save money as an example.

 

 

 


Thanks for the reply! Basically given my remaining amount and monthly payment...it would be stupid to refinance. I do want to be done with it as soon as possible. I'll try to make extra payments on my existing loan to get rid of it and pay less interest. I have 50 payments remaining. Just wanted to know if it was worth looking into a refi.

The truth is out there...
FICO scores: 764 (EQ) 732 (EX) 757 (TU) 9/14 | Goal score: 750+ (all 3)
Tradelines: Capital One QS NPSL (5.0k) | Discover IT (6.0k) | Walmart Mastercard (5.0k) | Chase Freedom NPSL (7.3k) | Citi Simplicity (9.3k)






Established Member
Posts: 25
Registered: ‎02-02-2013
0

Re: Should I refinance?

Even though it is only 25 a month in savings, the savings you would pay in interest are pretty nice.  Over the 48 month refi you would save about 400 to 500 dollars in interest.  You would take a hit on your fico, but its up to you to decide if it is worth it. 

Amex BCE: 3000, Discover It 2500, Capital One QS1: 1750

Established Contributor
Posts: 839
Registered: ‎10-25-2011
0

Re: Should I refinance?


MrPickleton wrote:

Even though it is only 25 a month in savings, the savings you would pay in interest are pretty nice.  Over the 48 month refi you would save about 400 to 500 dollars in interest.  You would take a hit on your fico, but its up to you to decide if it is worth it. 


I agree. I actually would refinance without hesitation. The savings does come out to be about $500 and to me that's worth it. And on top of that, I would continue to pay the $227 (your original payments) and that would help you save even more money on interest and pay the loan in a shorter number of months.

 

I'm a personal banker and do a lot of auto loans serving the Houston area.
I suggest first time car buyers to read the sticky guide in the auto loan section.
I try to check these forums often, but if I missed your post, please feel free to message me with a link to it.
Established Contributor
Posts: 839
Registered: ‎10-25-2011
0

Re: Should I refinance?

I have an auto loan that is 3.35% APR which is not a bad rate. But I'm going to try to refinance for better this february. I have $20K+ balance left. I'm aiming for a 2% interest rate.

I'm a personal banker and do a lot of auto loans serving the Houston area.
I suggest first time car buyers to read the sticky guide in the auto loan section.
I try to check these forums often, but if I missed your post, please feel free to message me with a link to it.
Valued Contributor
Posts: 2,110
Registered: ‎12-29-2011
0

Re: Should I refinance?

I applied for refinancing with Chase. I selected the 48 month term. Now I just have to wait for them to process my application. Don't know if I should apply elsewhere?

The truth is out there...
FICO scores: 764 (EQ) 732 (EX) 757 (TU) 9/14 | Goal score: 750+ (all 3)
Tradelines: Capital One QS NPSL (5.0k) | Discover IT (6.0k) | Walmart Mastercard (5.0k) | Chase Freedom NPSL (7.3k) | Citi Simplicity (9.3k)






Established Contributor
Posts: 839
Registered: ‎10-25-2011
0

Re: Should I refinance?


maiden_girl wrote:

I applied for refinancing with Chase. I selected the 48 month term. Now I just have to wait for them to process my application. Don't know if I should apply elsewhere?


You can if you want to. Chase is fast about getting processing an application. I wouldn't hesitate about calling in to check the status of the application after about 3-4 hours.

I'm a personal banker and do a lot of auto loans serving the Houston area.
I suggest first time car buyers to read the sticky guide in the auto loan section.
I try to check these forums often, but if I missed your post, please feel free to message me with a link to it.
Valued Contributor
Posts: 2,110
Registered: ‎12-29-2011
0

Re: Should I refinance?


SamsungHDTV wrote:

maiden_girl wrote:

I applied for refinancing with Chase. I selected the 48 month term. Now I just have to wait for them to process my application. Don't know if I should apply elsewhere?


You can if you want to. Chase is fast about getting processing an application. I wouldn't hesitate about calling in to check the status of the application after about 3-4 hours.


I just called in now and they said my application is still in review (I applied this morning). I applied to Lending Tree as well but I'm worried that request will result in multi inquires...I don't think I want to go with any of those lenders...lol.

The truth is out there...
FICO scores: 764 (EQ) 732 (EX) 757 (TU) 9/14 | Goal score: 750+ (all 3)
Tradelines: Capital One QS NPSL (5.0k) | Discover IT (6.0k) | Walmart Mastercard (5.0k) | Chase Freedom NPSL (7.3k) | Citi Simplicity (9.3k)






Valued Contributor
Posts: 2,110
Registered: ‎12-29-2011
0

Re: Should I refinance?

UPDATE

 

Received a call back from Chase. Approved for the following: I'll just stick with my current loan.

 
Approved loan amount$9,400
Annual Percentage Rate (APR)5.01 %
Approved monthly payment$216.51
Approved term48 months
The truth is out there...
FICO scores: 764 (EQ) 732 (EX) 757 (TU) 9/14 | Goal score: 750+ (all 3)
Tradelines: Capital One QS NPSL (5.0k) | Discover IT (6.0k) | Walmart Mastercard (5.0k) | Chase Freedom NPSL (7.3k) | Citi Simplicity (9.3k)






Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on actual applicant approvals and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.