How do u guys feel about refinancing your TL? What are the ups and downs?

 

I'd recommend it if your current rate is high... you could save quite a lot!

good: save $$$ long-term and short-term if you get a good refi rate.
bad: 1. depending on your current term and your new term, you may end up extending your loan term. 2. if you go with a different bank, it might look like there's a new owner since the title changes from one bank to another. 3. there's always closing costs associated with a refi, but this amount would vary from bank to bank.

 

OP check with Credit Unions....if your credit score is decent they offer very low APR refinance....

My car is paid off but they keep sending me refinance offers as low as 1.99%....so if your current rate is 7-8% i recommend doing it....

 

Please I would like to know more Aswell

 

I just did this with my car. My rate was a 6.75%, and after looking into it I was approved for a lower interest rate of 2.5%. The only downside, is my loan was extended 6 months. Ended up saving $100/mo though.

 

Most car loans are open and can be paid off at any time, although I have heard of some lenders who offer closed loans on cars for some reason...If you are in a closed loan, you will have to pay a penalty of some kind to get out of the contract...If your loan is open and you can negotiate a better rate with someone else for the same amortization period, go for it

 

If your main goal is to get a lower monthly payment, make sure you ask your bank how long they'll let you refinance your car now that it's 4 years old. Some banks won't finance a car that's more than 3 years old for longer than 3 years, which could potentially make your monthly payment higher.

That's just an example...every bank has their own rules.

 

For me it only makes sense if your purchase rate was very high.

 

If you're military USAA has good interest rates. That's who I have my loan through at 2.7%

 

If your interest rate is anything more than 3% then you have the opportunity to have a much lower rate. Its not unusual to now be able to get as low as 1.99% on used cars. I am currently using Pentagon Federal Credit Union for my 07 TLS and my rate is 2.49%. I bought the car used from a private owner.

 

pay cash

 

gotta love those Credit Union rates....



my next car will be paid by hard cash

 

Is refi worth it? It's not JUST the interest rate or the amount you save in payments. You can't judge on that alone.

First, take your current loan. Find the total costs of all payments assuming you keep the loan until paid off.

Then take the total cost of all payments you've made so far on the current loan PLUS the total cost (including fees, "closing", etc.) of all payments under the new loan.

That's going to give the best first approximation of which is the better deal. It takes into account how long you've had the car and the terms of the two loans side-by-side.


What it does not take into account is depreciation/resale costs at the end of each term (assuming you sell the car when it's paid off). If the new loan extends the term by, say, 18 months, your resale value will be "18 months" lower; could be a couple of thousand dollars.


BTW - the amount you save in payments is often a misleading sales tool. That money is only good for you if you spend it on something more financially beneficial than your car. For instance, if you save $100 a month and INVEST it at 5% or pay off other debt that has a rate higher than your refi, that's a gain for you; it sweetens the refi deal.

BUT if you take that $100 and spend it on hookers and beer that's a net loss financially. Even if it's more fun.

 

Check Pentagon Federal Credit Union. Currently offering 2.49% up to 60 months and 1.99% up to 48 months. I financed my '07 Type-S with them and it could not have been any easier. You don't have to be in the military to become a member either. You can donate $20 bucks to a non-profit that supports military families and then you can join PenFed. Details are on their website.

 

^^^ or he can go with DCU

Digital Credit Federal Union....they offer the same rates and all you have to do is open a savings account with $5 in there....which they refund once you close the account....

Also if you set up direct deposit in their checking account you save 0.5% APR

 

Well i just have to say thanks guys for the advice because my credit wasnt so high i had a 11. something apr but now that i refinanced it i went as low as a 5.1% apr so i guess thatll save me alot of money

 

11. something on a car loan??? Holy crap! My one emergency credit card with too high of a limit (for a TL-S owner) is even a considerably lower rate than that.

...congrats on dropping your rate though!!! It'll feel especially nice when you get first payment notice

 

i would not bother, you can pay MORE each month and get it down faster that way if you are looking to save money in the long run. I have always saved money that way on my car loans as I paid them off early and savea boat load in intrest payments....

 

Congrats bro....

yeah i remember when i got my car back in 07....my credit was new and DCU gave me a car loan @ 14%....I didnt wanna take my relatives help....

I got it refinanced after 6 months... 8%
Another 6 months.... 6%

At this point I had the car for 1.5 years and I had almost paid the loan off....i was on a 3 year loan and I paid a little extra every month....

Ended up paying the car in 2 years

 

I also have mine thru penfed also at a 2.49

 

Personally I'd like to refinance after a year or so......the interest rate has a little to do with it but mainly I'd like to pay the car off quicker. I've been paying extra every time and ideally I'd love to be able to refinance at some point for the same if not a few bucks more a month for a lesser term. If I can do things the way I have in mind I'd surely love to keep my TL for a while. I'd like a lower interest rate as well but wouldn't we all? 0 interest FTW. lol....probably not very likely on a used car.