topic Re: Refinance Help. To do it or to not? in Auto Loans

Refinance Help. To do it or to not?

Anonymous — Mon, 14 Aug 2017 20:26:46 GMT

Need some advice.

I purchased my car in Jan 2015 new for 24K. When I purchased my car, I got a high rate at 8.5% with chase. My credit wasn't the best.

Fast forward to now, my credit is as following:

796 Ex
760 TU

772 EQ

I am with a credit union (Schools First) and thought about refinancing my car to get a lower rate.

My question is if I should. I currently pay 422 a month with about 120 of that going to interest. The rest to the principle. I owe 14k now.

I worked hard to get my credit up to where it is and don't want any type of inquiry to mess it up. I have 1 inquiry right now on my reports, nothing else. 22% UTL on my credit cards. Etc

So would it be wise to try and refinance?

Thanks for you help all!

Re: Refinance Help. To do it or to not?

Appleman — Mon, 14 Aug 2017 21:20:43 GMT

Hello,

It looks like you have around 3 years left to pay at 8.5% interest. You are looking at right around $2000 in interest you will pay by staying with the current schedule.

If you refinace with PenFed and get at 36 month used car loan at 2.49% your payment will decrease to $385 and you will only pay $571 in interest.

If you refinace for 48 months on a used car at 2.74% your payment will decrease to $308 and you will pay around $800 in interest.

I recommned PenFed as you can make a Tax deductible donation for membership and they will pull do 1 EQ hard pull for membership, an auto loan refi and you could even apply for a credit card at the same time. This is the best bang for your buck if you qualify for the lowest rates.

You would save interest and have a lower car payment. You could even over-pay and accelerate your payoff. (If you are paying interest on credit cards, accelerate the payoff on the credit cards with the savings)

If you received a credit card that would lower your utilization. Get those credit cards below 9% and your scores will likely climb higher.

The other option is to call your credit union and see what they can do on a used car refinance.

I would say it would be worth it to refinace and save over $1,000 in interest over the next three years.

Re: Refinance Help. To do it or to not?

Harvey26 — Tue, 15 Aug 2017 14:55:46 GMT

@Anonymous wrote:
Need some advice.

I purchased my car in Jan 2015 new for 24K. When I purchased my car, I got a high rate at 8.5% with chase. My credit wasn't the best.

Fast forward to now, my credit is as following:
796 Ex
760 TU
772 EQ

I am with a credit union (Schools First) and thought about refinancing my car to get a lower rate.

My question is if I should. I currently pay 422 a month with about 120 of that going to interest. The rest to the principle. I owe 14k now.

I worked hard to get my credit up to where it is and don't want any type of inquiry to mess it up. I have 1 inquiry right now on my reports, nothing else. 22% UTL on my credit cards. Etc

So would it be wise to try and refinance?

Thanks for you help all!

I would say with those scores and like thomas said you would be saving alot of money and looks like SchoolsFirst has better rates than Penfed. I see they have as low as 1.99% for a Refi and they are already your credit union..

Re: Refinance Help. To do it or to not?

Anonymous — Tue, 15 Aug 2017 15:03:38 GMT

Make sure your LTV will get you a reasonable rate -- not sure what your banks/CUs require in terms of LTV on a refinance.

Re: Refinance Help. To do it or to not?

Anonymous — Tue, 15 Aug 2017 16:05:33 GMT

Thank you all for your help and advice. I will run to SFCU and get some info on what they can offer. Hopefully I can get that 2%.