Was this smart?

[northface28]

I have a current loan with WFDS, the term is 64 mos remaining @ 6% APR. My monthly payment is $328 but I pay $350. I refinanced with another company, the terms are now 60 mos @ 4% and the payment is $342. Did I make a mistake?

[Appleman]

If you are saving 2% in interest then no, you did not make a mistake.

Looks like you are paying $14 more a month but making 4 less payments. 

Multiply 4 X your payment amount. Take that total and subtract $840. That should equal the saving you will enjoy (unless there was a fee and subtract that as well).

($840 is the additional $14/month payment X 60 months). Paying extra will further drop your interest charge.

[Anonymous]

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@northface28 wrote:

@I have a current loan with WFDS, the term is 64 mos remaining @ 6% APR. My monthly payment is $328 but I pay $350. I refinanced with another company, the terms are now 60 mos @ 4% and the payment is $342. Did I make a mistake?

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No, you didn't make a mistake.  This is actually a smart move on your part as you get to save money.

[northface28]

I should add that even the payment amount for the WFDS is $331, if i dont pay the $19 and pay $350, the next month, it goes up to $355 from $331 or so. Initially the payment was $387 but I would pay more than the required payment to get some of that interest gone. 

[Appleman]

Ahh, so the real first payment was $387, but you have been paying a little extra and WFDS just trieds to lower the next payment.

You did the right thing, and are saving money!

[elim]

I'm guessing the loan is currently at about $18,600  ($18,600 @ 4% = 60 ea. $342 payments)

60 months @ 4% = $1,950 in interest

64 months @ 6% = $3,180 in interest

you will save $1,230 if you make the regular payment,  more if you continue to pay it off faster.

congrats

[surferchris]

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@elim wrote:

@I'm guessing the loan is currently at about $18,600  ($18,600 @ 4% = 60 ea. $342 payments)

@Anonymous months @ 4% = $1,950 in interest

@Anonymous months @ 6% = $3,180 in interest

you will save $1,230 if you make the regular payment,  more if you continue to pay it off faster.

congrats

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Agreed, and congrats.