Contemplating Refinancing

[Mdowning30]

I have about 30 months left on my used 2015 Camry XSE, at a pretty good interest rate that got refinanced back in 2021 at 5.5%, $356 monthly payment. With the recent rate cuts, how far along should i wait to refinance, with the December rate cut and moving into 2025 ? Im looking to refinance down to 4.75% or even lower with a credit union. I can either refinance my current loan from Tower Federal at 4.74% but would bump my term back up to 36 months lowering my monthly payment but increasing overall interest. Or Brightstar Credit union offers a 24 month term but at 5%

[FicoMike0]

I guess id keep looking for a 30 month or less loan at less than 5%. Hard to find a car loan less than 36 months. I'd hate to add to the term of a 9 yo car. Maybe take the best 36 months loan and then keep making your present payment, so you pay it early.

[Gregory1776]

Excluding the rate, how much extra income can you throw at the loan to pay it off quicker? I think that will save you more than refinancing. Do you need lower payments?

[Kforce]

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@Mdowning30 wrote:

I have about 30 months left on my used 2015 Camry XSE, at a pretty good interest rate that got refinanced back in 2021 at 5.5%, $356 monthly payment. With the recent rate cuts, how far along should i wait to refinance, with the December rate cut and moving into 2025 ? Im looking to refinance down to 4.75% or even lower with a credit union. I can either refinance my current loan from Tower Federal at 4.74% but would bump my term back up to 36 months lowering my monthly payment but increasing overall interest. Or Brightstar Credit union offers a 24 month term but at 5%

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I would take the 4.75% loan and keep making the same $356 a month payments.

Save ~$110 dollars in interest and have it paid one month early.

Current ~balance, interest and payments you are ~$730 interest loss.

4.75% with $356/m = $622 interest loss.

With current 5.5% it would take payments of > $410/m to save the same ~$110 as refinance.

The question is $100 worth re-financing, most of the interest on the loan has been lost at this

point in time.

[Kforce]

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@Gregory1776 wrote:

Excluding the rate, how much extra income can you throw at the loan to pay it off quicker? I think that will save you more than refinancing. Do you need lower payments?

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It takes quite a bit of extra payment to make up 0.75% loan with only 30 months left.

~ $50 a month would be needed.

[Realist]

Shop the rate, not the term (within reason).

Any online auto calculator with extra payments, will show you precisely how quickly you can pay down the loan with that extra addition.  All it takes is a little discipline.

[Mdowning30]

Waiting for this next rate cut to come and pass then maybe January i will go for it.

[mAtchew]

Any luck finding a bank with lower interest rates than you have currently? I have an auto loan with my credit union currently at 5.89% which was the lowest I received back in 2023. They now offer 5.69%, but I have already paid 15 months' worth of payments, so I would have to extend my loan in order to get the lower rate (60-month term, cannot afford payment @ the 48-month term, unfortunately). I need to do some research online to see if any other banks come close to these rates. Definitely not easy to find auto loans with low rates in this economy.