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Pen Fed Auto Refi Approval - take it or leave it?

anik28
Regular Contributor

Pen Fed Auto Refi Approval - take it or leave it?

I was approved to refinance my 2019 Honda Civic with Pen Fed - I purchased the beginning of this year, as I needed a car for work and knew the payments would greatly help build my credit. The current loan is with RAC with an interest rate of 15% (I KNOW) with a monthly payment of $452. Pen Fed is offering me 8% APR, for 48 months with a payment of $530 a month. I am unsure if I should take the higher payment but I am feeling that having a MUCH lower APR & getting my foot in the door with Pen Fed would be the right decision. I plan on trading the car in probably 2 years and think I will be happy if I paid more toward principal with Pen Fed vs it all going to interest with the current lender. 

 

Pen Fed Refi Offer

8.10% APR

48 Month Term

Loan Amount: $21,683

Monthly Payment: $530, Current: $452

 

Also wanted to understand how refinance will affect my credit, can I expect a drop in score with the previous loan being paid off & a new loan coming on my installment loans?

 

Thanks all!

Message 1 of 17
16 REPLIES 16
anik28
Regular Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

My interest would go from $262 a month, to around 140$, leaving $400 or so actually going toward the principal balance. I think the answer is clear but wanted to run this by others as Auto Loan interest has always been a bit confusing to me. The higher payment isn't ideal, but it would go toward me owning the car if I decide to keep it for the full loan length vs, throwing my money toward interest. 

Message 2 of 17
Rebuild2019
Valued Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

Sounds like PenFed is the better deal as long as you can make the payment without stressing yourself out. Definitely going to save you money.

@anik28 wrote:

I was approved to refinance my 2019 Honda Civic with Pen Fed - I purchased the beginning of this year, as I needed a car for work and knew the payments would greatly help build my credit. The current loan is with RAC with an interest rate of 15% (I KNOW) with a monthly payment of $452. Pen Fed is offering me 8% APR, for 48 months with a payment of $530 a month. I am unsure if I should take the higher payment but I am feeling that having a MUCH lower APR & getting my foot in the door with Pen Fed would be the right decision. I plan on trading the car in probably 2 years and think I will be happy if I paid more toward principal with Pen Fed vs it all going to interest with the current lender. 

 

Pen Fed Refi Offer

8.10% APR

48 Month Term

Loan Amount: $21,683

Monthly Payment: $530, Current: $452

 

Also wanted to understand how refinance will affect my credit, can I expect a drop in score with the previous loan being paid off & a new loan coming on my installment loans?

 

Thanks all!



CARDS: Discover It | QuickSilver One | Kohl’s | BBT Spectrum Cash Rewards | BBT Bright | PenFed Gold Visa | NFCU CashRewards | NFCU More Rewards | NFCU Platinum Visa | AMEX BCE | Verizon Visa | Wells Fargo Active Cash | Amazon Prime | OverStock
Starting Scores 05/2019: EQ:519, EX:525, TU:574
Message 3 of 17
anik28
Regular Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

 @Rebuild2019 that my biggest hesitation- but I'm dumping money away with the current loan right to interest. In all the payments I've made, my loan balance as barely budged. 

higher payment but payments that are actually going to the principal balance.

Message 4 of 17
Rebuild2019
Valued Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

Sounds like a deal if you can work it out. Good Luck @anik28. I joined PenFed early 2021 and in September got my first card with them. Always a hard decision when you pay a little more. Update us on what you decide.

CARDS: Discover It | QuickSilver One | Kohl’s | BBT Spectrum Cash Rewards | BBT Bright | PenFed Gold Visa | NFCU CashRewards | NFCU More Rewards | NFCU Platinum Visa | AMEX BCE | Verizon Visa | Wells Fargo Active Cash | Amazon Prime | OverStock
Starting Scores 05/2019: EQ:519, EX:525, TU:574
Message 5 of 17
anik28
Regular Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

@Rebuild2019 my gut says to go with Pen Fed. I've read great things here about their products and service, it would be a good way to establish a history with them & obtain a credit card as well. Which one did you end up getting?

Message 6 of 17
4sallypat
Established Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

I am looking at refi my Honda Clarity at lease maturity next month.

My dealer has been hounding me to turn in my lease so that they can make a boatload of cash!

Of course I asked, how much for a new 2021 Clarity and the monthly lease would be almost double!

 

Since I will keep my "used car" - PenFed's loan will be 2.59% at 48 months.

 

Once I get the car refinanced, I will apply for their credit card...

Message 7 of 17
Kforce
Valued Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

Yes, Yes, Yes, --- take the new loan if you can afford the payment.

You have already lost over $2,500  interest over the last 10 months.

With the new loan you can pay for two more years and not cost you $2,500

It will save you a lot of money   Heart

Message 8 of 17
Rebuild2019
Valued Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

@anik28 I have the Visa Gold. May try for the Power Cash in a few months.

CARDS: Discover It | QuickSilver One | Kohl’s | BBT Spectrum Cash Rewards | BBT Bright | PenFed Gold Visa | NFCU CashRewards | NFCU More Rewards | NFCU Platinum Visa | AMEX BCE | Verizon Visa | Wells Fargo Active Cash | Amazon Prime | OverStock
Starting Scores 05/2019: EQ:519, EX:525, TU:574
Message 9 of 17
anik28
Regular Contributor

Re: Pen Fed Auto Refi Approval - take it or leave it?

@Rebuild2019 im going to try for the Gold Visa in 6 months or so, I just signed the refi documents this morning with Pen Fed. Very happy to be getting my interest rate way down and build a history with Pen Fed. 👍🏼

Message 10 of 17
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