Should I refinance my car loan?

Submitted by batcave007 t3_11ecmbj in personalfinance

HI All-

I think I ought to refinance my car loan but for some reason I can't seem to pull the trigger, would really appreciate your insights and sarcasm (pls don't hold back).

Total Amount: 32K

Current APR: 8.25%

Refinance APR: 5.34%

Loan term: 60 months (both cases)

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My goal is to pay off this loan as quickly as possible however at the same time, I hate the fact that I have terrible interest rate and have been thinking about refinancing it. Is there any reason why I shouldn't do it?

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Thanks again!

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Comments

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alexm2816 t1_jad82yn wrote

You shouldn't refinance if there are fees, payoff provisions, other details that make refinancing more expensive for how you plan to pay the loan off.

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innkeeper_77 t1_jad9o4v wrote

Yes. Aside from this there is no reason you can’t just keep paying it off faster even with a refinance. Good loans will not have prepayment penalties.

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Werewolfdad t1_jad68ey wrote

>Is there any reason why I shouldn't do it?

Unless the refinance lender is charging large up front fees, there is zero reason to put off a refi any longer

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JellyDenizen t1_jad6oqz wrote

No reason not to refinance, you'll save a lot of interest.

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batcave007 OP t1_jadb0yr wrote

Thanks guys- This helps. I just completed the application

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sephiroth3650 t1_jadgimp wrote

Assuming no loan origination fees, there is no reason to not refinance. The only question is how far you are into the current loan. If you're 24 months in, you don't want to recast things and pay out for a new 60 month term. What I'd do is keep making the current payments, so that you'll still get the loan paid off in the next few years. But you'll save on interest with the lower rate.

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