Should I refinance?

[vV35Hszm]

I have a 72 month auto loan at with Navy Fed 8.39%.

I have a refinance offer at 5.49%.

Any reason NOT to take it?  Should I wait a bit and hope for even better?  Anywhere else I should check?

[Anonymous]

Some things to consider.....

How far along are you on the 72 mo loan?  Would it be a "new" 72 mo at the lower APR, or would it be 60, 48, etc...?  A re-finance will show as a paid trade line, and a "new" trade line and that will effect your AAoA.  If you were say, 2/3 the way through that 72 mo installment loan and went back to "square one," your scores would be dinged a little for the percentage of the loan remaining (100% versus 66%).  

Those are some of the initial things that come to mind, and those are temporary things that will adjust and improve over time.  You would also want to calculate how much you'll be saving in interest over the life of the loan if you re-finance at the lower APR.  I'm sure there are some very smart loan people that have more good things to consider than this, but there are 2 cents from me.  

[vV35Hszm]

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@Anonymous wrote:

Some things to consider.....

How far along are you on the 72 mo loan?  Would it be a "new" 72 mo at the lower APR, or would it be 60, 48, etc...?  A re-finance will show as a paid trade line, and a "new" trade line and that will effect your AAoA.  If you were say, 2/3 the way through that 72 mo installment loan and went back to "square one," your scores would be dinged a little for the percentage of the loan remaining (100% versus 66%).  

Those are some of the initial things that come to mind, and those are temporary things that will adjust and improve over time.  You would also want to calculate how much you'll be saving in interest over the life of the loan if you re-finance at the lower APR.  I'm sure there are some very smart loan people that have more good things to consider than this, but there are 2 cents from me.  

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Very helpful thanks... I'm only around 6-months into the loan.  I'd only do a 60 month on the refi so I think it's worth it.

[dabrian]

Shorter term with a better rate? Definitely.

[Kree]

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@vV35Hszm wrote:

I have a 72 month auto loan at with Navy Fed 8.39%.

I have a refinance offer at 5.49%.

Any reason NOT to take it?  Should I wait a bit and hope for even better?  Anywhere else I should check?

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I'd like to focus on the "Should I wait a bit and hope for even better?" question, as I think a refinance is in your best interest.

1. Who are you checking rates with? We might be able to suggest better options to check.

2. What is your score? If it is near a rate threshold it will be easier to see if waiting will be beneficial.

3. What factors might change in the next 3 months. I.E.  inquiries falling off, derogatories falling off, balances paid down, AAoA passing a threshold, AoOA passing a threshold. etc  If you are unsure about these, the more information you can provide the better we can estimate a scoring change.

4. Can you pay a chunk of the loan down?  If your installment utilization can drop below a threshold it could improve scores.

[Anonymous]

If no new credit is to be applied for in the near future, then your score change (for better or worse)

doesnt really matter.

.....All that would matter is saving money. 3% diff could be alot, and the higher the amount the higher saved.

Now if you do plan on apping for anything near term, then unnecessary score drop may

be important to you checking further into.