Re-finance question

[Anonymous]

Hi. This is first time we post in this forum. 

This is our situation:

• I have just checked my credit score: EQ 677  (the mortgage we got 4 months ago is not showing)

•  car loan with Nissan since 2008: about $22,000, 2.9% interest, 60 months.

• currently our pay off amount is about $10,500, 28 months more to go and monthly payment is $400

We just think $400 per month is high; $300 or less per month would be nice. Do you guys think we can get approved and if so what would be an acceptable interest? Thanks for your replies.

C and T

[IOBA]

If you think the interest is too high, why  not pay extra on the principle each month?   You would pay down the loan faster and save on interest!

If you re-fi, you will be paying loan fees (probably) and all the interest on the new loan will be front loaded.

[IOBA]

Ps - 2.9% interest on a car loan is pretty good!  I am not sure if you could improve upon that, other than by paying down the loan faster.

[Anonymous]

I think what he is asking is if he can refinance to extend the loan out another 12-18 months to bring his monthly payments down below $300.

[IOBA]

Could be.  I sometimes misread the message.

What do you think would be an acceptable interest rate for the poster?  I see interest rates now at 2.99% (lowest) and up to 13.99% (highest).

[Anonymous]

Yes, that  was our question. We would like to extend the loan 18 - 24 months more in order to bring the monthly payment down. What about rolling $1,000 to $2,000 more over the loan? Have any of you guys done something similar? Thank you for your answers.

[IOBA]

My first reaction is to say if you can afford your monthly payment, keep it.  

My second reaction is to say if you can afford to send in extra each month on the principle, do it.

You may not be able to do the refi - due to loan to value.  

If getting the payment lower is really important to you, then talk to a lender and ask for the general parameters.   What would they value your car at?  (They can do this without pulling credit.)   Find out from your current lender what your balance pay off is.   Ask the potential new lender what the fees would be to refi your car.  Ask them if you would have to come to the table with any cash.   Ask what the FICO score should be (don't let them pull your credit).  

Once you have more information, decide if it's going to be worth it to refi.

Good luck.