Upside down on car note right now...

[Carloscda40]

Yes I know I know!!

Rolled old car note into another car note a yr ago, have 27k left on the note, YES I KNOW I KNOW!!

My question is if I was to pay half that off now would it lower my payments, would it be worth it?

[Ardecko]

Would it lower your payments? No.

Would it be worth it? Maybe. A lot of other variables... What's your interest rate? Do you have any other loans, cards, collections with outstanding balances or larger interest rates?

If you wanted to lower the payments, you'd need to refinance. If you have the cash to pay it down, talk to a credit union about it.

[Carloscda40]

I only have about 1500 in CC debt which all CCs will be paid back to a 0 balance next month, APR is 21% for the car.

Unable to refi becaueof LTV so that why I was thinking if I could just pay have the note off or get a personal loan.

[marty56]

I would check with a local CU and see if they would refi you.  Some CUs will refi at %110 so if you can pay down enough to make their threshold and you FICO scores are good enough for them, you could save a lot of money by doing the refi.

[Kree]

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@Carloscda40 wrote:

I only have about 1500 in CC debt which all CCs will be paid back to a 0 balance next month, APR is 21% for the car.

Unable to refi becaueof LTV so that why I was thinking if I could just pay have the note off or get a personal loan.

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Not sure how much you still owe. Will assume 20000 for round math. Assuming you owe 20,000 and pay it off over 4 more years (about 600 a month) you would pay just over 10,000 in interest.

If you pay a lump sum of 10,000 now, and continue your monthly payments of 600, you would pay the balance off in under 2 years and only pay 2000 in interest. A savings of 8000 monies.

If you pay a lump sum of 10,000, and refinance to 10APR for 4 years. you would pay about 250 a month and about 2000 in interest.  Same total money, but more affordable monthlys.

Lump sum 10,000 refinance 10APR for 2 years.  about 450 a month and 1000 in interest.  Lower payments, and an additional 1000 saved over just lump suming. 

NOTE: many auto loans can have additional processing fees. So actual savings could be less due to the fees. Also a refinance will count as a new loan on your account, which has credit score implications.

[Carloscda40]

That 3rd option sounds good, but would the LTV still come into play?

I know here comes the Flames, the shaking of the head, palm in hand!

27k is the balance @760mo.

I know I know I know!!

But with me finally getting myscores up and keeping my nose clean I won't be in this position again!

[Kree]

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@Carloscda40 wrote:

That 3rd option sounds good, but would the LTV still come into play?

I know here comes the Flames, the shaking of the head, palm in hand!

@27k is the balance @760mo.

I know I know I know!!

But with me finally getting myscores up and keeping my nose clean I won't be in this position again!

---

LTV would still come into play, I was giving generalized scenarios.  If your large payment can drop the LTV low enough, no one will touch the loan. Your Credit Scores will also come into play,  Fewer people will refinance at a lower rate if your scores only support your current APR.

@27k @760  huh. for some reason I thought the 27k was your starting balance.

So I'm assuming you are 4 months into a 60m loan.  You will pay about 15,000 in interest. The 10,000 would save you a little over 10,000 in interest and cut the life of the loan to 29ish months. 

[Carloscda40]

First off thank you for the replys!

I checked out a local CU. I mentioned the LTV and asked if they had a certain threshold % and the guy said no.

He pulled from Experian which only had me @602 but TU has me @635 so that sucked! He did mention if I didn't fit their criteria I would've been denied off the bat. I wasn't approved just yet, I have to send in my last 2 paystubs for verification.

Hopefully, things are moving in the right direction I'll know by Friday.

[Carloscda40]

So heard from the CU, they me 9.7%apr.

Either 48mos @$700 or 60mos @$590.

Was thinking about going with 60mos and paying extra towards the principle.

[Hotcoals91]

The way i see it the most important thing is you have a car, so no reason to be defensive. That said, it is always advisable to pay more than the minimum on auto loans because any extra goes to the principle and reduces interest...therefore IF you can afford those extra payments while keeping a fund in case of emergency, i say go for it.