@Anonymous wrote:
Hi everyone, trust you all doing well.
Ok this is my story.
I had my car loan with Santander with the interest rate of 18%, The payoff amount was $17000 with 48months left to pay.
i read most of the great deal from DCU and applied for second chance refinance with them with interest of 8% due to my Eq score of 632
DCU approved me with full amount on Friday.
They never mentioned about FINANCIAL CHARGE of $3,924.28 to me.
Had a call from from their CS. And all she said was "your loan is for $17000, you monthly payments will be xxxxx. At 8%. For 65months, we will send send you the edoc to sign it"
Was at work n signed it asap without going through the paper because the system takes you to where you have to sign.
I later printer a copy and saw the financial charge on there. With the note " total payments you have to pay is $20,583.54. I'm like Noooooooo.
My reason for refinancing is to reduce my interest and to payoff quickly and get a newer car.
My question this deal was signed on Friday, can I pull off my loan. Before they send a check to Santander?
or there is something I'm not understanding with all this financial charge,
please help me out. Before it's too late. Thank you.
Oh okay, now I see where you are confused (other thread).
$17,000 was pay off which is the remaining loan without interest, its the money you are borrowing.
8% for 65 months is your interest rate which is the amount you borrowed ($17k) PLUS interest over 65 months
$20,584 is the total you will pay back included principle (the amount you borrowed) plus interest
With your original loan based on the numbers you supplied you would have paid $23,970
@$17,000 @ 18% for another 48 months.
In addition you extended your payback from 48 months on your current loan to 65 months on your DCU loan, so not only did you extend your payback for an additional 17 months, but you saved $3386 in interest over the original 18% loan.
Had you kept to the original terms using 48 months for the new loan (same as remaining payments on the old loan) your total payback would be $19,921 saving you $4049 off your original loan.
Going from 18% to 8%, plus adding 17 months to your payback and still saving thousands of dollars, you won big time on your refi.
Edit Add: You pay interest on the unpaid balance or loan "principle" - you can reduce the amount of interest you pay by paying extra each month or making lump sum extra payments. The "Truth in Lending" disclousure lists the cost of borrowing (amount borrowed, amount of interest if taken to full term and number of payments for the full payback of the loan). If you ask for a payoff amount it will list the remaining principle which in your case will be currently $17,000 (+/- based on daily interest and payoff day).
