How To Refinance a Car Loan

Edmunds.com

How To Refinance a Car Loan

Refinancing your car loan is easier than you think and can save you a lot of money in the long run.

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natdalton7

Interestesting article. I just bought a car in the last year and I definitely am what you would call the The Newly Educated Remorseful one. I am definitely going to be refinancing an auto loan. Thanks for the great info!

johnla1

Hello and help please. I have 34 payments left on my car of $250.86 monthly at 8.74% interest. I try to pay $50 more every 2 weeks towards principal only. I was approved for a refinance loan at 5.50% 24 months of $331.51 monthly or 27 payments of $296.67. Minimum refinance amount is $7500 which I don't need all but have to if I want to refinance. Which would be my best saving option please?

kyfdx

johnla1 said:

Hello and help please. I have 34 payments left on my car of $250.86 monthly at 8.74% interest. I try to pay $50 more every 2 weeks towards principal only. I was approved for a refinance loan at 5.50% 24 months of $331.51 monthly or 27 payments of $296.67. Minimum refinance amount is $7500 which I don't need all but have to if I want to refinance. Which would be my best saving option please?

$7500 principal

Under your current loan, you'll pay back about $8530.
24 month option: $8010
27 month option: $7960

If you are comfortable with the $331/mo. payment, then by all means take the 24 month option.

johnla1

Thanks. Over $300 mark might be a stretch for me but I know less payments of course means better savings. What if i were to chose the 27 month option then send extra principal only payments in when I can?

kyfdx

johnla1 said:

Thanks. Over $300 mark might be a stretch for me but I know less payments of course means better savings. What if i were to chose the 27 month option then send extra principal only payments in when I can?

As you can see, the difference over the loan term between 27 months and 24 months is just $50, total.

If the budget is tight, just take the 27 months, and when you get a little extra, stash it away in your rainy day fund. That way, your money is available if needed. 27 months will go by fast.

ufgators

Is there a minimum amount of time to wait to refinance after a new car purchase? My dealership told me to wait 3 months, but I found a good rate and don't want to risk it going hire. I purchased the car 30 days ago.