TheBlackPearlZ

iTrader: (15)

whats up guys and gals. i have sort of a predicament. well not really a predicament but more so a question. when i get back to the states in a few months i want to refinance my car to give me lower payments. and i know you guys are reading my sig right now and thinking...hes making payments and has all that on his car? yeah well **** warranties!! FTW!!

anyways, i was wondering if you guys could help me out. im 21, i am in the army (so i have no payments BUT my car...and cellphone(40 a month)), and i dont pay rent, and im single. i do not mind extending the duration for my payments in months. i just want lower payments.

any reccomendations on good places to get refinanced. and any info on how hard it is to get refinanced??

i make roughly 25k a year...and like i said, i dont pay for anything...so its 25k spending money basically.

thanks all

KManZ

iTrader: (8)

25k a year... gaahhhh Just stay in the Army until you pay it off. And if you refinance, it'll be that much longer until pay off. My vote is to keep what you got and wait for promotion. Oh, and take free college classes while you are in.

TheBlackPearlZ

iTrader: (15)

im going to college on the army starting in the fall...ill be getting officer pay in a couple years...im not worried about the payments i just want them a little lower, i dont care about the time.

just so i have some extra spending money in college thats all

NickRaine78

iTrader: (4)

CApital ONe and HSBC (household) do this. Depending on where you are in your payments (how many years in?) I wouldn't do it. I did it before my 1st payment was due and skipped 2 payments and lowered my rate by 3 points. The may want to check with your credit union as well as they normally have the best rates.

howey

The only way this is worth doing is if they will refinance you at a lower APR and keep you at the same term. This is generally what most younger people with low credit scores and small payment history do after paying on the vehicle for 12-24 months because your score and history should have gotten better over time.

KManZ

iTrader: (8)

Thats what my plan is... not because I am young, but because I made a big mistake when I WAS young and am paying the piper now. Oh well, live and learn.

OP: Howey is right:

$25k at 10% for 72 months = $464/ mo

Lets say you refinanced the remaining $17,950 after 2 years, for 48 months, at 8%:

$17,950 at 8% for 48 months = $438/ mo

Now, if you refinanced for 72 months again (pretty silly if you ask me):

$17,950 at 8% for 72 months = $314/ mo


Not sure of your terms and amount owed, but you can see the point. Sure, the refinanced monthly payment is lower, but the problem is you will be paying a lot more interest if you refinance.

My opinion, having been young and in the military:

Refinance. But this isn't the best choice.

My opinion, having been young and in the military and learned my lesson:

Keep your current loan so you can be done with it sooner and pay less interest.

howey

This is 100% correct. The only way you will not pay extra interest when refinancing is if you refinance at a lower APR and stay with the current term. For example; if you have a 25k loan at 10% for 72 months and you are down to 48 months left on the term, then you will want to refinance the remainder of the loan at the lower APR (say 7.5%) for 48 months. Your monthly payment will drop only slightly if you do it this way but you will pay less in interest in the long run.

My suggestion would be to take the little extra money you are saving and place it in a savings account to help you pay the loan off faster.

davidv

iTrader: (2)

I doubt if you will be able to finance the balance of the loan. Its a used car. Who is going to finance a used car for 60 months.

Zivman

iTrader: (19)

do not extend the terms of your loan. If you can refi at a lower rate within the remaining length of your loan, do that. Extending your loan to reduce your payments would be very stupid especially considering almost all your income at this point in your life disposable. Get the car payed off as soon as you can if you are unhappy with the terms of your loan. extending the payments will just mean paying more for the car, but doing so with smaller payments. I have seen too many friends refi their cars, especially after those 0-0-0 deals where you pay nothing on the car for 12 months.. and 7 yrs later they are still making payments

long story short, when all your income is disposable pay off the car as quickly as you can. Extending the term of your loan would be foolish

M_parallel

That's easier than you might think....72 isn't much of a stretch either.

If you have the discipline to make bigger payments when you can afford to and simply want a smaller monthly obligation, re-fi won't kill you. However, making lots of minimum payments on a re-fi is pretty wasteful in the big picture.

KManZ

iTrader: (8)

Just stick out your current payment... you are in the military, you get promoted no matter what unless you are a shitbird.