my wife and i have one car payment that we aqquired about 16months ago i pay about $50 more on the bill each month. Our intrest rate with our loan company is a little high and my wife thinks that if we refiance that would be better but i would hate to loose out on the extra that i have been paying and gain a longer loan with less of a payment. my thought is to just continue paying the extra...not sure who is right
2007-06-19 01:07:57 · 9 answers · asked by sully 1 in Cars & Transportation ➔ Buying & Selling
If you refinance at a lower rate, you will save money. Call your current lender and get a "payoff" amount. This is what it would cost you to pay off that loan today. This should be less than the total of payments scheduled, because the interest is figured into those payments. You say you have been paying an additional $50 per month on the loan. This also reduces the loan balance.
Check to see what kind of rate and payment you can get if you refinance. You may be able to keep the payment the same, and reduce the term of the loan. Even if you have a new loan that is longer, with a lower payment and interest rate, there is nothing keeping you from continuing to pay extra each month.
2007-06-19 01:38:34 · answer #1 · answered by fire4511 7 · 1⤊ 0⤋
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2016-09-26 15:15:35 · answer #2 · answered by ? 3 · 0⤊ 0⤋
Refinancing your car loan will not save you money. You bought your car 16 months ago. Let's say you got a 4 year loan. So you owe 44 more payments.
If you refinance you are back to 60 months. The money you save will disappear when you add 16 more months onto a lower interest loan.
Plus if you are not specifying that the extra money you send them is to be applied to PRINCIPLE ONLY you are wasting your money. If they apply that extra money to Interest then you are not reducing the amount you borrowed.
2007-06-19 06:41:29 · answer #3 · answered by mccoyblues 7 · 0⤊ 0⤋
Look at it this way. if you paid $50 more each month, you have paid an extra $800 in principle and interest. Depending on what your interest rate is...you may be able to save thousands of dollars on interest. And check with your bank. The $50 extra may be applied to principle. If so, it is not lost. You have lowered you payoff amount by doing it.
2007-06-19 06:10:38 · answer #4 · answered by Jay P 7 · 0⤊ 0⤋
if you refinance you will probably have a longer loan. everything depends on the year of the car... you may not be able to refinance depending on how old the car is. call your local bank and ask them "if i have a xyz year car, how long would you refinance it"... your interest rate will always be based on your credit. your current loan will probably be more appealing to you, but it doesn't hurt to check out your other options.
good luck.
2007-06-19 01:13:23 · answer #5 · answered by Anonymous · 0⤊ 1⤋
Refinance at lower interest and pay extra it will pay off faster.
2007-06-19 01:12:11 · answer #6 · answered by James B 5 · 1⤊ 0⤋
Call your bank, give them a list of the terms and rate you have and see what they can do. Call is free.
2007-06-19 01:11:23 · answer #7 · answered by wizjp 7 · 1⤊ 0⤋
lowing the interest rate is always a better move, saves you money in long run.
2007-06-19 01:13:34 · answer #8 · answered by RYAN C 2 · 0⤊ 0⤋
You are. If you refi you'll probably have more (but lower) payments. Stay with what you have and you'll actually pay less.
2007-06-19 01:12:28 · answer #9 · answered by Anonymous · 0⤊ 1⤋