Comments on: Auto Loan Advice : How to Refinance a Car

By: Curious

Curious — Fri, 02 Oct 2009 23:16:45 +0000

Car loans are USUALLY simple interest, but I've seen some that are not. You should ALWAYS ASK this question when you apply for a loan.

If you refinance, you'll get a payoff amount for the first loan. That can be the principal amount for the 2nd loan, or you can borrow more if you have the equity in the car, or less if you want to pay some of the loan out of pocket. That's all up to you.

Whether you've only paid interest on the first loan depends on the terms of the loan. Compare the original principal to the payoff amount. If they're the same, you've paid only interest. I hope that's not the case, or you're going to be really upside down on the new loan.

By: Christina

Christina — Fri, 02 Oct 2009 08:03:47 +0000

Where did you refinance at? If you can go there in person, do so. If not, you may consider consulting an attorney.

By: Hope

Hope — Fri, 02 Oct 2009 07:21:32 +0000

I don't know if he will improve his situation.

He needs to look at why his credit is bad. I would have been looking for a less expensive car with lower payments with an interest rate that high. You deserve a better car when you have earned it and can afford it. Meaning you have built good credit and are not skimping for money.

I worked with a guy that made considerably less than I did. He was complaining that he had to move to a cheaper apartment. His new Camaro payments were $550, my two year old Corolla payments were $210. I still have the Corolla after 9 years. A new car would cost me higher insurance rates, higher registration fees and car payment. The money I saved allows me to buy another car for cash if I want.

By: CP

CP — Thu, 01 Oct 2009 07:00:56 +0000

CP, Try getting an online auto loan quote. http://www.autoadviceonline.com/Auto-Loans.html The questionairre will let you know if you can be approved. It's free and you can get an answer in minutes.

By: Phil

Phil — Thu, 01 Oct 2009 05:43:54 +0000

Go to Wells Fargo Auto Finance. They helped me when I was in your situation…. Good luck!!

By: Brandy A

Brandy A — Wed, 30 Sep 2009 18:58:27 +0000

Your bank is calling to tell you this not to save you money (as much as I would like to think that is their intention) but rather to keep your loan with their company. Interest rates are lower and they are doing their best to keep you from refinancing with another bank. If that happens they lose all the interest.

So my recommendation is to call them, ask how much interest you have left to pay on the current loan, just interest. Then ask the total interest on the life of the new loan. If the new one is lower, go for it. That's the logical solution. Unless you really need the extra money per month, then it might be worth it to you to go for the lower payment regardless.

Refinancing is great in some cases, and not the best idea in others. Just be smart about your decision.

Hope this helps!

By: Anatketani

Anatketani — Tue, 29 Sep 2009 18:56:14 +0000

Auto finance is what I do for a living and sorry to say that's the way car loans work. They are just like home loans for the first 1/2 to 3/4 of the loan term your paying mostly interest.

Most people are not in any kind of equity position on a 72-month loan until around the 60th payment.

In your case you are most likely so upside down that refinance is not a option,I would suggest trying your own local bank or credit union they will be your best options.

Good luck.

By: Curt F

Curt F — Tue, 29 Sep 2009 18:50:41 +0000

Auto finance is what I do for a living and I have done this several times.

Explain to your credit union what you want to do and as long as the loan amount is within there guidelines what they will do is write two checks, one to Carmax for your payoff and one to you.