Just planning ahead and was wondering what your take was since I've heard several different opinions on Refinancing Auto Loans.
My current loan:
2015 Dodge Challenger R/T Plus (New)
Financed: $36,119.62
Term: 75 Months
APR: 3.34%
Payments: $534.28
Total Interest: $3,951.12
Payoff date: Feb 16, 2021
My plan is simple.. Tell me if this makes sense, Pay $150 extra each payment for a year and 7 months. By this time I'll have already paid $1,627.86 in interest and I'll refinance thru DCU with a balance of 24,746.23 at 1.49% which will look something like this:
Financed: $24,746.23
Term: 60 (Since I doubt they will finance me with 56 months)
APR: 1.49%
Payments: $428.25
Total Interest: $948.59
Payoff Date: June, 16, 2021
So just by the refi alone I'll be dropping my payment 106.03 a month and saving $1,374.67 in interest charges. Now the loan would stretch out 4 months longer than the orginal, but by dropping the payment I'd be able to pay more towards the principle to cut down the loan faster which would look something like this:
Financed: $24,746.23
Term: 60 Months
APR: 1.49%
Payments: 628.25 ($200 extra)
Total Interest: $641.48
Payoff Date: November 16, 2019
By paying the additional $200 to the principle i'll be saving a total of $1,681.78 and cutting down the loan a total of 15 months from the orginal making it a 5 year loan total vs a 6 year and 3 month one.
So punching the numbers in obviously makes sense, but my question is it really that easy? Is there any fine print or 'catch' if you will I'm missing like Refinance fees etc...?
