Sweet Auto Loan Refinance Deal!

[BassBoy]

This past weekend, I looked over my current loan with AmeriCredit and I was very unhappy. I've barely put a dent in the principle balance....so.....I looked at refinancing the loan.

I went to E-Loan and applied and within an hour, I had a very sweet offer from Wachovia. They were able to drop my interest rate by 6% and I was able to shorten the term by 9 months and no loan fees. Of course my monthly payment will go up, but it's not that bad.

Here are the numbers:

Original Loan:
$12,891.13
13.39% with AmeriCredit
60 months
$295.89 per month
Total in payments - $17,753.40
Interest paid - $4,862.44

Refinance Loan:
$10,618.94
7.49% with Wachovia
36 months
$330.27 per month
Total in payments - $11,889.72
Interest paid - $1,270.65

If we do the math here, I've made 15 payments with AmeriCredit and have paid, $4,438.35 and now we add the 36 payments with Wachovia of $11,889.72, I will have paid, $16,328.07. Now we subtract the $16,328.07 from what I would have paid in total with AmeriCredit of $17,753.40, I just saved myself $1,425.33. Not to mention, I'll own my car 9 months sooner.

For those of you that may be looking at refinancing your higher interest rates, it only works to your advantage if you are able to lower the interest rate and shorten the term (if that's possible). What I would not advise is for anyone to refinance their auto loan and legnthen the term. If when you refinance, if you have, let's say, 48 payments left, DO NOT refinance for, let's say, another 60 months because you're just flushing money down the toilet.

[JRScott]

Congrats

[crazydebt]

what do you think I should do. Here are the details of my car loan:

With Capital One Auto
60 months at 11.95 percent
Loan amount of 20,000k
Remaining is 15,488.89
interest YTD is 1335.89
I opened this in 04/10/2006

I guess if I started in April of 2006, I have made 17 payments already. Current monthly payment is 445 so that would be 7565 that I have paid so far. That means so far in interest, I have pay 3053 dollars.

let me know your thoughts. Thanks.

[BassBoy]

My thoughts are if you are able to lower the interest rate and keep the remaining term (43 months left) and you lowered your payment a little, there can be a benefit. On the other hand, you do have a fairly decent rate (IMO) and you may not be able to do any better or drop the rate enough to shorten the term and/or save much. Although, if you can save, let's say, $1000 in interest charges, I would tell you that you have done pretty good.

[crazydebt]

yeah i did apply for refinancing and they dropped the interest rate down to 9 percent or something like that however that was for another 60 months. I'll try eloan and see what kind of interest I can get. My FICO is in the 680 now whereas it was 620 before.