topic Re: Refinance or Lease? in Auto Loans

Refinance or Lease?

Anonymous — Thu, 13 Aug 2015 04:27:45 GMT

I've been paying off my first car loan for about 18 months now; started February 2014. While I am able to keep up with my payments, it would be nice if i could get them lowered in order to focus on paying down my credit card debt and start saving a bit more. My question is: what makes more sense?

1) Refinance with DCU for a lower rate/monthly payment.

2) Trade in the used car and lease a new car for 2 or 3 years. Hoping to take advantage of model year end sales.

Car Details:

CREDIT SCORE: 700+ (from credit karma. Haven't pulled my Fico Score yet)
CUSTOMER STATE OF RESIDENCE: FL
NEW/USED: USED
YEAR OF VEHICLE: 2012
MAKE: Toyota
MODEL: Camry
MILEAGE: 16,000. Currently has 29,000
RETAIL/LEASE: Finance
AMOUNT OF LOAN: $18,000~
TERM CONTRACTED: 66 months
APR/LEASE RATE: 8.49%
MONTHLY PAYMENT: $347
ANNUAL INCOME: $32,000~

Re: Refinance or Lease?

dabrian — Thu, 13 Aug 2015 10:50:36 GMT

Definitely refi. But I absolutely hate leases so I'm pretty biased. If you have over a 675 you should be able to refi to 1.99 with dcu.

Re: Refinance or Lease?

Creditaddict — Thu, 13 Aug 2015 15:50:44 GMT

If you like your car I would just refi

Re: Refinance or Lease?

Anonymous — Thu, 13 Aug 2015 17:31:54 GMT

I defintely like the car. I like the idea of making it an asset once the loan is paid off in 4 years.

I will put in an application with DCU. If i'm approved and my payments drop below $300, I will continue to pay my $350. That way I should be able to pay it off sooner.

Re: Refinance or Lease?

Anonymous — Fri, 14 Aug 2015 00:35:28 GMT

DCU application submited. Now the waiting game.

Re: Refinance or Lease?

Anonymous — Thu, 20 Aug 2015 01:57:58 GMT

Looks like I've been approved! Uploaded my pay stub and submitted a membership application. Can someone explain the refinance information form? What are the last three fields I need to fill out: 10 day pay off, pay off good through and daily interest.

Re: Refinance or Lease?

Anonymous — Thu, 20 Aug 2015 02:43:43 GMT

@Anonymous wrote:
Looks like I've been approved! Uploaded my pay stub and submitted a membership application. Can someone explain the refinance information form? What are the last three fields I need to fill out: 10 day pay off, pay off good through and daily interest.

Your current lender should offer you a payoff amount. It will state that is good through a fixed date (for example 10 days)

You can calculate your daily interest by taking the principal owed x your current interest rate & then divide by 365 to calculate

your daily interest.

Principal 15k - interest rate 8.9% . 15000 X .089 = 1335.00

$1335.00 divided by 365 = $3.66

daily interest is $3.66

Re: Refinance or Lease?

Anonymous — Thu, 20 Aug 2015 07:04:39 GMT

Refinancing is a great move here, congratulations. Anyone who has an improving score and high APR can benefit from refinancing a car loan, there are no fees so even if all you are saving is a point or two it still makes sense, I am sure in your case you are cutting the APR in half which is great. Please report the numbers when you have them

Re: Refinance or Lease?

Hoya08 — Thu, 20 Aug 2015 10:35:43 GMT

gib_6808 wrote: You can calculate your daily interest by taking the principal owed x your current interest rate & then divide by 365 to calculate
your daily interest.
Principal 15k - interest rate 8.9% . 15000 X .089 = 1335.00
$1335.00 divided by 365 = $3.66
daily interest is $3.66

As a caveat, this is the daily interest amount before your payment due date. The daily interest amount decreases month-to-month. However, since the OP is refinancing relatively soon, this technicality won't matter.

Re: Refinance or Lease?

Anonymous — Thu, 20 Aug 2015 15:40:07 GMT

I appreciate the info. I'll fill out the form tonight and upload it.

Re: Refinance or Lease?

Anonymous — Fri, 21 Aug 2015 18:40:16 GMT

All done! Refinance approved at 3.99% for 60 months with direct deposit. Payments dropped from 350 to 260. I'll continue to pay the 350 in order to pay off early. Thanks to everyone for the information and of course for recommending DCU.