Thinking about refinancing my car

BucketmanBucketman Call meSkraggRegistered User regular
Hello helpful friends, I've been paying on my car for about three years now, but recently moved out on my own. Problem is that $430 a month it's a huge payment, so I'm thinking about refinancing. I have much better credit now then I did back then, and hopefully I can get smaller payments. I have a few questions though. Like can I do it through my original lender? I have it through Ford Motor Credit but I have no idea if I can do it through them. And if not, what is my best bet? A bank or a private lender? Any general advice?

I Appreciate any help you can give

Posts

  • zepherinzepherin Registered User regular
    Credit union is a good choice to start. The original lender might be able to drop your rate, but shop around.

  • BucketmanBucketman Call me SkraggRegistered User regular
    I guess I just really don't know how to start. Should I just walk into a back our credit union, even one I don't bank at and say "I want to refinance my car"?

  • Dr. FrenchensteinDr. Frenchenstein Registered User regular
    most credit unions require you to be a "member" (have an account there) to get loans/credit cards/etc. but usually a small deposit is enough, it could definitely be worth it.

  • zepherinzepherin Registered User regular
    Bucketman wrote: »
    I guess I just really don't know how to start. Should I just walk into a back our credit union, even one I don't bank at and say "I want to refinance my car"?
    Yeah, generally they ask you to join (which you should consider Credit Unions are generally less assholey than banks) or even a bank, or you can do it online and not have to leave your house. Nationwide, Chase, Wells Fargo, many Credit unions all have online applications you can fill out. You can do it in person too if you want, but I prefer to bank in my underwear, and if you qualify for USAA, you can try to get a loan with them but they are very conservative about who they lend too, but they also have very good rates.

    That being said. Fuck Bank of America. Seriously do not get a loan with them.

  • ThundyrkatzThundyrkatz Registered User regular
    Refinancing just means that you take out a new loan and use that cash to pay off the old loan.

    Some things to think about. If you can get a new loan for the same or shorter term then what you have remaining on your old loan, but with a lower interest rate. Then you can save some money. However if you take out a new loan that has a longer term, even with a lower rate you may end up paying more over all.

    Its unlikely that Ford Motor will do this for you, they may lower your rate if you ask. But there is not a lot of upside for them.

    Your local credit unions typically have the lowest rate. But look around at all your local banks. Just walk in and say you want to refinance your car loan. They will have a loan person to help you.

    Bankrate.com has some calculators that you can plug in amounts, rates and terms into to see what your savings (costs) will be.
    http://www.bankrate.com/auto.aspx

    Bucketman
  • JasconiusJasconius sword criminal mad onlineRegistered User regular
    if you have a credit score above 700 and your car is in any kind of shape relative to what's left on the current loan, then basically any bank on the planet will offer you a refi

    it's just a matter of finding an interest rate

    this almost always can be done online

  • BucketmanBucketman Call me SkraggRegistered User regular
    yeah I'm going to start at my actual bank since the've always been good, then check a few others in the area and see what I can get inerset wise. Though even with checking my credit reports I have no idea what my actual score is.

  • darqnessdarqness Registered User regular
    Absolutely go to your local credit union. Original the best I could get was 5% through other banks unless there was a special 0% financing deal going on. Since I've switched to a credit union they've gotten me 1.5% on my last two car loans with no fuss at all.

  • DevoutlyApatheticDevoutlyApathetic Registered User regular
    I'm going to be a bit of a downer here and point out that used car loans are almost always at higher rates than new car loans. Trading one for the other is going to require a number of circumstances to line up right.

    Out of curiosity, what was your interest rate, your term and how far into the term are you?

  • BucketmanBucketman Call me SkraggRegistered User regular
    I had 8% interest and in a 5 year loan I guess (it's been 2.5 and my credit site says I'm 50% complete) shopping around there's a credit union out here that quoted me 4% on a new loan, I'm heading up there tomorrow morning to check it out

  • MrTLiciousMrTLicious Registered User regular
    Check it out but be ready to be disappointed by one-time fees. Refinancing is surprisingly expensive, so even though you may get your monthly payments down, this may get drowned out by these.

    Make sure you ask them to give you a quote on a loan big enough to pay of the car, and all the extra fees, and then compare the monthlies, so it's apples to apples.

  • ThundyrkatzThundyrkatz Registered User regular
    So just some thoughts. Based on the info you have given here it seems your loan balance is currently around $11,800. Including interest you are looking to pay, if you keep your loan, a total of 13,078 through the next 2.5 years @ $430 per month.

    So here are some scenarios if you can get the 4% loan, depending on what term you can get. Also like MrTLicious said, be sure to factor in any fees that you will be assessed to refi.

    5 years would be a payment of $217 total payments of $13,057 saving you $21 total
    4 years would be a payment of $267 total payments of $12,816 saving you $262 total
    3 years would be a payment of $349 total payments of $12,564 saving you $514 total
    2.5 years would be a payment of $415 total payments of $12,450 saving you $628 total
    2 years would be a payment of $513 total payments of $12,312 saving you $766 total

  • JasconiusJasconius sword criminal mad onlineRegistered User regular
    did you have to provide vehicle info for that quote?

    Because 4% sounds... unrealistic for a refi.


    Interest rates go up on "used" cars, not down. In the eyes of the bank, your car would be used

  • AspectVoidAspectVoid Registered User regular
    Jasconius wrote: »
    did you have to provide vehicle info for that quote?

    Because 4% sounds... unrealistic for a refi.


    Interest rates go up on "used" cars, not down. In the eyes of the bank, your car would be used

    Refinancing a loan is different from getting a new Used loan. Just a quick check of loans in my area, I could get a Used car loan for 2.74% while a refinance for a current loan is at 2.34%. There's also the matter of his credit rating. If his credit rating has improved over the years he's had the loan, he can get a better deal on it as well.

    PSN|AspectVoid
  • KarrmerKarrmer Registered User regular
    Credit union. I had a 6% rate on my car and went into my credit union and they pretty easily refinanced it down to 1.79% (after incentives for having direct deposit and stuff). It was easy as hell and saved me around $4k over the life of the loan and lowered my payments by $200 a month (because I also put some extra money into the new loan to make the overall balance a decent bit smaller).

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