Auto Refi

[Anonymous]

So since I'm done with my Ch 13 (discharge prior to COVID...maybe Feb 2020? I forgot), my auto loan isn't reporting. I currently have 19 months left, balance owed of $7565 (that's the pay off date as of 7/1/2020), the APR is 8.34% and monthly payment of $418.27. I did a Capital One Auto Refi pre-qual to see and it offered to refi it at $7565, APR 3.88%, term of 24 months and monthly payment of $329. Now I know it extended the term by 5 months but the APR dropped 5% and I plan and will continue making the regular $418 payment on the new loan. 

I'm trying to calculate the savings...I'm usually good at math but I can't seem to calculate this. But I think overall, the drop of 5% APR and continuing to pay it at its current amount due of $418 is a no brainer. I'll be saving SOME and this auto loan will report to my credit report. So I think it's a Win-Win. Any thoughts?

[Anonymous]

24mo loan @3.88% is total of 7875

19mo loan @8.34 is total of 8100

so savings to refi would be $225 (less than 1 payment amount)

perhaps a little bit more when making extra towards the principle (actually maybe just ending the loan early)

To refi, you will take a hit to your credit with a hard inquiry and a new loan.

The loan utilization will will be maxed for quite a few months and heavy for good year or more.

Not sure if you plan to care about your scores for the next 12 months?

If not then there is savings to it.

However the hard inquiry will only hurt your score for 1 year, but will stay on report for 2 years.

For me personally, I would not do the refi in this scenario,

$200-300 would not be enough to entice me, but may be enough for others. 

This is weighted also with making the extra payment to the original amount (since you do not NEED the lower payment)

[Anonymous]

@Anonymous  thanks for your response. At this time, I really dont care about my scores for the next 12 months. I already have a mortgage but unfortunately when I filed Ch 13, it stopped reporting and since the discharge it's still not reporting. Not sure how I go about that having them report it again. I just want something else besides credit cards reporting on my CRA. I dont plan on purchasing/financing anything in the near future.

[Anonymous]

Others can chime in on the reporting issue, as I have no xp on that.

But if strictly for dollars saved, then it would save around the 250-300 dollar mark

So under the savings alone, it would be worth it, without worry to sacrificing any credit scoring/reports