Refinanced??

[Trevorw24]

I know this is of topic, sort of, but I need help. This is my first car purchase. A banker from the bank I have my loan with just offered to refinance my loan at a lower APR. It's 1.2 percent lower. Should I do it? It costs $155 to do it, but the savings would be greater than that. Has anyone done this? Thanks!

[Dreamer2430]

Definately. A 1.2% drop is pretty good. You'll end up paying less in interest to the bank.

[Trevorw24]

Originally Posted by Dreamer2430

Definately. A 1.2% drop is pretty good. You'll end up paying less in interest to the bank.

Right! But, why would they offer this to me? What's their gain?

[zogster]

I am going to refinance at some point as well. I've only made 2 payments so far on the vehicle and I had no credit history when I bought it, so it wouldn't help me to refinance at this point in time.

I was told I needed to wait to make 6 payments or so and that I could then get a better APR. How many payments have you made?

The more on time payments you make, the more you will improve your credit and the better rate you should be able to obtain.

I'm hoping to cut my APR from 7.24% to about 3.5% in a few months. My sister had a good but limited credit history and got a 3.29% on her Cruze. I will save over $3k over the course of the loan by doing the refinance.

[Trevorw24]

Originally Posted by zogster

I am going to refinance at some point as well. I've only made 2 payments so far on the vehicle and I had no credit history when I bought it, so it wouldn't help me to refinance at this point in time.

I was told I needed to wait to make 6 payments or so and that I could then get a better APR. How many payments have you made?

The more on time payments you make, the more you will improve your credit and the better rate you should be able to obtain.

I'm hoping to cut my APR from 7.24% to about 3.5% in a few months. My sister had a good but limited credit history and got a 3.29% on her Cruze. I will save over $3k over the course of the loan by doing the refinance.

I have made 10 payments.

[zogster]

Originally Posted by Trevorw24

I have made 10 payments.

Mind posting your current APR and your previous credit history if any? I'm trying to figure out if the 6 months I was told is accurate, or if I need to wait longer.

[Dreamer2430]

So, wait it's from the same bank that you originally financed your Camaro with? That does seem a bit odd that they would offer it up like that. They're already making money off of you, so why would they want to make less?

I refianced mine after a year. When I bought the Camaro I had another auto loan on my credit so my rate was pretty high (8.2%), but I sold the other vehicle and went to my wife's credit union and it dropped down to 3.2%. They're incentive was to get a new customer. So, the fact that it's the original lender seems off to me. Have you been looking into refiancing for a while. Maybe somehow your bank caught on to that and this is their way to try to keep your loan with them.

[Trevorw24]

Originally Posted by zogster

Mind posting your current APR and your previous credit history if any? I'm trying to figure out if the 6 months I was told is accurate, or if I need to wait longer.

I had 2 credit cards with perfect history prior to getting the car. I had my parent co-sign and got a rate of 4.1 percent. I put down 3000. Not sure about refinancing, I have no experience with this.

Originally Posted by Dreamer2430

So, wait it's from the same bank that you originally financed your Camaro with? That does seem a bit odd that they would offer it up like that. They're already making money off of you, so why would they want to make less?

I refianced mine after a year. When I bought the Camaro I had another auto loan on my credit so my rate was pretty high (8.2%), but I sold the other vehicle and went to my wife's credit union and it dropped down to 3.2%. They're incentive was to get a new customer. So, the fact that it's the original lender seems off to me. Have you been looking into refiancing for a while. Maybe somehow your bank caught on to that and this is their way to try to keep your loan with them.

I'm a bit confused on this too. I am going to call the bank tomorrow. I wasn't looking at all, they just called me out of the blue.

[pincoin]

You will save money in the long run, but does the term start over?

[jtzako]

It does seem odd that the bank you're already with would do that.. I refinanced mine recent and went from 5.25% down to 2.49% but it was with a different bank.

[CaryE1]

I purchased my Camaro with financing through the dealer. I then refinanced a few days later through my credit union to save a couple of %. Hadn't made a single payment. No big deal.

I have heard of banks calling with offers to refinance. They usually charge an up-front fee, but if it will save you $ in the long run, why wouldn't you? But since your bank is offering to refinance you, you may want to check around and see if you can get an even better rate through someone else.

[hunterv6]

look at the term to make sure they don't extend the loan if they do it not worth it. sometime banks do this but make it up by extending the loan. remember they are in the business to make money. if term the same then no harm refinance it will save you$$$$.

[bannonm]

When you refinance you need to look at how much the new loan is costing you in interest and fees. Then take the remainder of the payments you currently have and determine how much interest you will be paying until the loan is payed off. That's the only way you'll know if you're saving anything.

So you have already paid 10 months, let's say for discussion sake your loan is for 60 months. So you have 50 months left to pay. You need an amortization table to calculate the interest you paid on those first 10 payments. The table should also tell you how much total interest the old loan is costing you. Subtract the two and that is how much left the loan is still costing you. If that number is more than what this new loan is costing you in terms of interest and fees, then you are better off doing it.

Of course, only do this if it is a legitimate offer. Be careful.

[Trevorw24]

Originally Posted by bannonm

When you refinance you need to look at how much the new loan is costing you in interest and fees. Then take the remainder of the payments you currently have and determine how much interest you will be paying until the loan is payed off. That's the only way you'll know if you're saving anything.

So you have already paid 10 months, let's say for discussion sake your loan is for 60 months. So you have 50 months left to pay. You need an amortization table to calculate the interest you paid on those first 10 payments. The table should also tell you how much total interest the old loan is costing you. Subtract the two and that is how much left the loan is still costing you. If that number is more than what this new loan is costing you in terms of interest and fees, then you are better off doing it.

Of course, only do this if it is a legitimate offer. Be careful.

Thanks, I will be careful!

Originally Posted by hunterv6

look at the term to make sure they don't extend the loan if they do it not worth it. sometime banks do this but make it up by extending the loan. remember they are in the business to make money. if term the same then no harm refinance it will save you$$$$.

Exactly, they are looking for money also!

Originally Posted by CaryE1

I purchased my Camaro with financing through the dealer. I then refinanced a few days later through my credit union to save a couple of %. Hadn't made a single payment. No big deal.

I have heard of banks calling with offers to refinance. They usually charge an up-front fee, but if it will save you $ in the long run, why wouldn't you? But since your bank is offering to refinance you, you may want to check around and see if you can get an even better rate through someone else.

We'll see what happens tomorrow!