Refinance Question!

[SteveUrkel]

Hello, ive never refinanced my truck. Ive recently started to pay my statement online and noticed I was paying way to much on the interest a month. 

Im a little confused on how I should approach this. 

Original Loan Amount: $30,504

Remaining Balance: $18,401

 So far I have paid $16,720 including the interest. My current interest rate is 5.3% with monthly payments of $440 on a 2012 Chevy Silverado with 15,000 miles. 

For some reason I thought I owed around $12k. I guess I just spaced out on this issue. 

If I refinance, how would my payments look? And will the term go back to 72 months??

[Anonymous]

---

@SteveUrkel wrote:

Hello, ive never refinanced my truck. Ive recently started to pay my statement online and noticed I was paying way to much on the interest a month. 

Im a little confused on how I should approach this. 

Original Loan Amount: $30,504

Remaining Balance: $18,401

 So far I have paid $16,720 including the interest. My current interest rate is 5.3% with monthly payments of $440 on a 2012 Chevy Silverado with 15,000 miles. 

For some reason I thought I owed around $12k. I guess I just spaced out on this issue. 

If I refinance, how would my payments look? And will the term go back to 72 months??

---

You can refinance for whatever term you want, generally. But the older the vehicle, the shorter they may go. I see a CU in your sig, they're usually the best bet for refis for cars IME. Up until DH's new car earlier this year, the last few vehicles we've either gone with our CU right off the bat, or refi'd to them down the line. I'm actually going to look into refi'ing his new car this summer after some home loan stuff settles down. He had some errors in his student loans that are straightened out, and I bet we can shave 1.5% to 2% off. I'm going to check with our CU that we use, but also DCU based on finding out about it here on this site. 

My CU will loan to 100% (I know it's more on new, it might be slightly more or less on used) the KBB value of the car. We only owed a couple thousand on my car and last spring refi'd it to pull out about $10k towards a kitchen reno. Low interest loan on asset I plan to keep. It was a good deal. 

[CH-7-Mission-Accomplished]

---

@SteveUrkel wrote:

Hello, ive never refinanced my truck. Ive recently started to pay my statement online and noticed I was paying way to much on the interest a month. 

Im a little confused on how I should approach this. 

Original Loan Amount: $30,504

Remaining Balance: $18,401

 So far I have paid $16,720 including the interest. My current interest rate is 5.3% with monthly payments of $440 on a 2012 Chevy Silverado with 15,000 miles. 

For some reason I thought I owed around $12k. I guess I just spaced out on this issue. 

If I refinance, how would my payments look? And will the term go back to 72 months??

---

@$18,000 @ 2.5% for 48 months would be $394.45/month.

This is what I would do so that you are paying off the car faster than it is depreciating.  You would save the most on interest this way.

If you did 60 months it would be $319.45/month.

I would not finance a used car for longer than 60 months.  It is a near guarantee of being upside down.

[Hoya08]

---

@SteveUrkel wrote:

Hello, ive never refinanced my truck. Ive recently started to pay my statement online and noticed I was paying way to much on the interest a month. 

Im a little confused on how I should approach this. 

Original Loan Amount: $30,504

Remaining Balance: $18,401

 So far I have paid $16,720 including the interest. My current interest rate is 5.3% with monthly payments of $440 on a 2012 Chevy Silverado with 15,000 miles. 

For some reason I thought I owed around $12k. I guess I just spaced out on this issue. 

If I refinance, how would my payments look? And will the term go back to 72 months??

---

On all loans, your payments are 'mostly' interest at the begining of the loan term.  Once you reach a certain point, your 'interest-payments' will start getting smaller.

You can refinance to any term length as long as the collateral (vehicle) and loan reqeust meet the bank's/cu's loan requirements (ie, under 100k miles, under 7-years old, etc).

Also, your numbers don't seem correct.  A $30,504 loan at 5.3% for 72 months should be around $495.52 per month.  If your payments are $440 per month for 72 months, you're APR should be around 1.25%.

Based on $30,504 at 5.3% for 72 months, I assume you've made 26 payments to reach a remaining balance around $18,357.98:

(72-26 = 46): 46 remaining payments x $495.52 per month = $22,793.92 total remaining payments

$22,793.92 - $18,357.98 = $4,435.94 in remaining interest payments

If you were to refinance the current balance ($18,357.98) for 60 months at 2.99%:

60 payments x $329.79 per month = $19,787.24

$19,787.24 - $18,357.98 = $1,429.26 in total interest payments

$1,429.26 - $4,435.94 = -$3,006.68.  In other words, $3,006.68 of saved interest payments.