DID WE MAKE GOOD DEAL OR NOT

[RUSTY101]

My dh and I went to a cu to see about refi our auto loan. We were with Wells Fargo Auto Fin. They charged us 15.95%. However, we have paid this for 4 yrs. Had it down to pay off in 2 yr.

Went to credit union, got 8% and upped loan to 3 yrs with $80.00 a month cheaper payments.

Did we goof or was it a good deal ?

[Anonymous]

Still pay it off in two years, then no you did fine....although had you kept it at 2 years you probably could have saved a 1/2 point in interest.

If you pay it out over the next 3 years at the better interest rate then you won't really benefit much from the refinance..... so just make sure and pay it off in 2.

[Anonymous]

It was probably a good deal, assuming your costs weren't ridiculous. IIRC mine were $25-50 for a new title in the CU's name. I second the motion to aim for a 2 year payoff. Let's say you had 4700-ish left on the loan..

At 15.95% for 2 years = $820 paid in interest
At 8% for 3 years = $602 paid in interest
At 8% for 2 years = $401 paid in interest

Ok, I did a whole bunch of improper rounding but that's the basic idea of things. You saved yourself $200 in interest and you could nearly double that and save yourself another $200 by paying around $213 a month (then being paid off in 2 years). You can play with the numbers yourself at bankrate.com.

[RUSTY101]

Thank You for the comments. The cu only charged us $5.00 for title change.