Navy Federal strikes again!

[Anonymous]

I had resigned myself to the idea that I would be stuck with my 8 year old car with the ridiculously high interest rate.  Out of curiosity, I called NFCU a few weeks ago to ask about refis for older cars.  I gave my info to the rep and much to my surprise, she said that from what she could see, I should be able to qualify for a refi. Cut to yesterday when I decided to go ahead and app for the refi and see what happens.  I submitted my app, it went into review so I figured it was a no go.  The next day I got an email from them asking for more info, I called and they approved it!  What!? Down from an interest rate of 27% to 7.84%. Woohoo!  I'll be saving around $175 per month.  NFCU is definitely on my Christmas list.

[Appleman]

Almost a 20% drop! Congrats

[Anonymous]

Wow, that is amazing... Enjoy it and congrats.

[Anonymous]

Congratulations on your refi...always nice to save some money....

[JustBPatient]

Good job!

[Anonymous]

Thanks for the congrats, everybody.  I am very happy with it.  My question is, can I expect to see any kind of  score bump from paying off the old high interest auto loan and replacing it with a lower interest one?

[Appleman]

Actually...hate to break it to you but your score will DROP!

It will be as if you threw your credit file over a cliff... Ok that is simply not true.

Truthfully, your score will take a temporary hit.

1 new inquiry > might see a small drop

1 new account > a small drop 

The old account will be closed that was paid off by a certain percentage. Say you paid off 20% of the loan, now the new loan has a 100% balance. Installment loans are scored differently but the process of paying down the balance improves the score.

AAoA may drop with a thin file > possible score drop.

As I said this will be temporary and saving almost 20% > worth it!

[Anonymous]

Congrats, don't worry about your scores your saving thousands of dollars.  Whenever a loan is paid off and you have an inquiry you will take a little hit but from my experience the scores bounce back very quickly on refi's because you will have an installment loan reporting.  It will be well worth a loss of a few points for 2-3 months.  If you can swing the payment you have been making it might make sense to shorten the term and maintain the same payment you have which would save you even more interest and would  get the car paid off before it gets too terribly old and becomes unreliable.  Just a suggestion.  The other option is to keep the term you have and make extra principle payments so you have the flexibilty on payment amount.

[Anonymous]

I too just refinanced. I was with Santander ( new loan in April of this year) at 20.7%.  Refinanced with my credit union in July at 5.7%. I know, its not the best rate out there but certainly better than what it was before!  Since the loan was so new, it saved me about 15K in interest so Im pretty happy about it.

Congrats on your new interest rate!!

[Appleman]

Had to do the math on that one, but with the drop from 20.7% to 5.7% the savings are huge.

$30,000 loan at 20.7% x 72 months is $22,618.36 in interest

$30,000 loan at 5.7% for 72 months is $5492.26 in interest

Nice job with the re-fi