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Old 02-22-2010, 07:07 AM
 
28 posts, read 81,554 times
Reputation: 79

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I purchased a 2007 Honda Accord brand new in 2007. Loan amount was a little over $20,000 for 75 months at 6.7%(Credit Score 690). I had just purchased a new home in 2006 at that time so my credit score took a little hit at the time I purchased my car. Monthly payments are $337.46.

Anyway, the interest rates are much better(3.2-3.7%) and credit score is 716. I have a little over 3 years left to pay off the car. I'm with Security Service Federal Credit Union. Is it worth refinancing?

Thanks in advance.
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Old 02-22-2010, 07:44 AM
 
Location: Purgatory (A.K.A. Dallas, Texas)
5,010 posts, read 13,147,325 times
Reputation: 2440
If you can cut a year or so off the term, then absolutely refinance.
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Old 02-22-2010, 07:52 AM
 
28 posts, read 81,554 times
Reputation: 79
What do you mean by cutting a year off? I would like a lower monthly payment, but I don't want to start all over again with the same loan terms, 75 months. I think if I cut a year off now(2 years left to pay it off) wouldn't the monthly payment be higher than what I'm paying now?

Sorry, I'm not sure how the refinancing works.
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Old 02-22-2010, 08:30 AM
 
11,820 posts, read 21,388,542 times
Reputation: 11522
Typically used car interest rates are higher, if you are getting a 3% interest rate on a used car loan take it.

Run the numbers, see how much it will cost to refi w/ fees and compare to what you will pay.
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Old 02-22-2010, 09:12 AM
 
Location: Purgatory (A.K.A. Dallas, Texas)
5,010 posts, read 13,147,325 times
Reputation: 2440
Quote:
Originally Posted by Yellabone View Post
What do you mean by cutting a year off? I would like a lower monthly payment, but I don't want to start all over again with the same loan terms, 75 months. I think if I cut a year off now(2 years left to pay it off) wouldn't the monthly payment be higher than what I'm paying now?

Sorry, I'm not sure how the refinancing works.

Yes, if you can refinance it and go from 3 years to 2 years, it's worthwhile.

Otherwise, no. Right now, you are mostly paying in to principle, not interest.
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Old 02-22-2010, 09:20 AM
 
28 posts, read 81,554 times
Reputation: 79
Quote:
Originally Posted by getmeoutofhere View Post
Yes, if you can refinance it and go from 3 years to 2 years, it's worthwhile.

Otherwise, no. Right now, you are mostly paying in to principle, not interest.
I think I'm using the wrong online calculators because I have about $14,000.00 (3.5 years)left to pay it off. Which would be the amount I'd want to refinance. I'm currently paying $337.46. The calculators are showing that my monthly payments at 3.5 years would be a lot higher than what I'm paying now!
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Old 02-22-2010, 09:55 AM
 
Location: Mount Laurel
4,165 posts, read 9,040,245 times
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Are you sure you can get that type of interests rate for a used car? You also have to consider the current value of the car. If what you are refinancing is below a certain percentage, look for the rate to be more.

You have to get a full detail of a new loan before you can really compare. If a new loan is only available in 60mos, don't be afraid to go that route. Just pay an additional torward principle each month.
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Old 02-22-2010, 10:01 AM
 
Location: San Antonio, TX, USA
5,142 posts, read 11,446,140 times
Reputation: 2505
I would just apply and see where you stand. It will hurt your credit score just a tad but if you can save some serious interest, go for it!
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Old 02-22-2010, 10:11 AM
 
3,698 posts, read 10,202,194 times
Reputation: 2609
Are you trying to save money from your monthly payment, or are you interested in saving money in interest? If you can get a refinance loan for longer than your current term, then you'll pay less each month but you'll pay more interest in the long run. There's not much point in refinancing for a shorter term since you can just do that yourself by paying more against the principle each month.
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Old 02-22-2010, 10:12 AM
 
Location: Inland Empire, Calif
2,887 posts, read 4,798,654 times
Reputation: 2779
You aren't going to want to hear this, but I would dump the car and buy one I could afford. A good
$3-4 k car, or less with no payments, will serve you just as well, and you will be able to breath a little...
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