Refinancing Question.

[xgac12x]

So I currently bank with SunTrust, and I have my car loan through there. (72m 5.39% $350.62 a month), and I have the chance to refinance through a local credit union at 4.5% interest. Currently I have 66 months left on the car loan, and they're saying at 4.5% interest, my payments would be $340.92 a month on a 66 month loan, and if I went back to 72 it would be $315 a month. Should I do the 72 month term? I pay half every two weeks, and I will still pay the $350 so it'll be a little extra every month. Just wondering if it's worth it or not.

Thank you

[jrands]

Have you made 6 payments already or 5?

[xgac12x]

Well I've had the vehicle since January. I guess 6 payments. But they asked me if I wanted to start a loan over with a longer term or just continue it from 66 months. Shortening the Loan technically

[jrands]

Here are some numbers I worked out.

Current Loan

Sale Price: $21,529 (?)

APR: 5.39%

Loan Term: 72 months

Monthly: $350.62

Loan Total: $25,245

Paid So Far: $2,104 (=$350.62x6mos)

New Loan

Remaining/Loan Amount: $19,888

APR: 4.5%

Loan Term: 66 months

Monthly: $342.44 (what i calculated)

Your Monthly Payment: $350

Total Loan: $22,536 (64 payments of $350 plus 1 payment of $136 in the 65th month)

Total Loan Overall: $24,640 (=$22,536+$2,104)

Net Benefit: $605

Overall, if the APR for the 72-month term is still the same as the 60-month term at 4.5%, you'll save the same amount of money ($605). This is because the APR is the same and you'll be paying $350 per month regardless and would still be making the final payment of $136 dollars in month 65 of the new loan. The one benefit of the a 72-month loan over a 66-month loan, assuming APR to be the same, would be that you'd only be legally responsible to pay about $317 per month as opposed to $342. Hope this helps.

[xgac12x]

And also, I make a biweekly payment of $175 to cut down on interest too. It's just easier to budget as well.