Back in July 2000 I got a bank loan for my S2000. Back then everyone was like "the s2k will only be made for one year, and only 5000 made" yadda yadda. So I really wanted one so I got a bank loan for the cost of the car, $34952.95 at 9.25% for 6 years, 0 down. So my payment is $636.42 a month until august 15, 2006. So that is $5091.36 in principal and interest left to pay (8 payments left at 636.42 a payment, payout is 4,328.03)

I was looking at bankrate.com and Capital One has refinancing for 6.75% for 3 years, now downpayment, no fees, no prepayment penalty. Using their calculator 3 years at 6.75% on 4328.08 is $133.14 a month for a total of 4793.04.

Now, its not the savings of $300 if I did that that interests me. Why I'd want to refinance is because in April 2001 I bought a house (nothing fancy, 1400 sq ft, small yard $97.2k closing price, basically I changed from paying rent at an apt to having a house for the same amount each month). I've always had to have a roommate with me to make all of the bills.

To break it down:

I make 2380 a month after taxes. The bills each month are:
car - 636.42
house - 719
food - 200
gas - 200
water - 40
insurance - 200
natural gas - 30
electricity - 150
credit card - 150
phone+dsl - 100
gym - 30
sewer - 30


So the total for my bills is 2485.42, which is more then I make, but my gf and sister live with me and they pay a combined rent of $550 a month. So 2380 + 550 - 2485.42 = 444.58 left after paying all the bills for available for misc expenses (clothes, home repair stuff, etc)

But, its just not enough. At the end of each month I only have a few dollars left in my bank account. I'm living paycheck to paycheck. And I have some home repairs I need to do. Such as, I've had several different roommates here over the years and the house smells like dog/cat pee, so I ripped up all the carpet, but now I just have bare concrete floors so I need to do something about that.

So, I was thinking I could refinance with Capital One to have $500 more a month, and then just deal with paying $133 a month for 3 years (and the extra insurance that comes along with it).

So basically, should I hurt myself a little in the long run by lengthening whats left of my loan to 3 years so I will stop hurting myself in the short term by being flat broke? Because right now I can't afford anything. No, I don't want to buy a TV or anything, I just want to get enough money together to replace the ripped out carpet with some cheap laminate flooring or something, and I'm tired of beeing flat broke at the end of each month.

So, what is your opinion on what I should do?

 

look for a local credit union...they offer way better rates than banks. The one where I live has a rate of 5.15% but obviously it will differ for each region.

 

If there is any equity in your house at all, look into paying off your car loan with a home equity line of credit. Not only will the interest rate probably be better than 6.75, but you'll be able to write off some of the interest on your tax return as well. And it will likely give you enough extra to do your home repairs without waiting for the savings to accrue.

 

Maybe you can refinance and pay it off in a year. I wouldn't extend the loan to 3 yrs if i were you.

 

Just make sure to run the numbers good. I doubt you can refinance a loan for a period as short as 1-2 years. If you can just make sure that the difference in interest paid is worth the trouble.

Credit Unions are the way to go for sure though.

for the Equity Line of Credit as well. If you have any equity in your home, and your credit is good this would be a good option as well. The interest rate probably won't be as good as a car loan through a credit union, but it has its own advantages.

Craig

 

It is good that you bought your house more than 4 years ago, you should have some equity in your house now. You should looking for home equity loan first, it usually has lower interest than car loan and can be tax deductable if you itemized your deductions in your Federal tax return. If you can not get a home equity loan with interest rate you like or the fees are too high, then the next best thing is check your local Credit Union(s) to see if you can re-finance your current car loan and some extra $ for installing new floor. My Credit Union willing to re-finance car loan up to the current car value for pay-off current loan and extra $ to use as I pleased.

You seem to be a responsible person, trying to satisfy current needs but afraid to get into long term debt. If I was in your shoes, I would get home equity loan if possible, but do not waste your new found money on fancy things like $5k plasma TV.

 

I got 4.75% from a credit union. I would look into it.

 

another option is to sell the car for a cheaper car with better gas mileage and lower insurance rates.

 

I second that, esp if the s2k is your only car. Your car pmt is almost as much as your mortgage! That's not good. PLus the s2k is just going to continue to depreciate. Getting a refi for a depreciating asset doesn't make sense to me. I understand your reasoning, it is logical, however I would just go for a cheaper, newer mulitpurpose car.

 

$636.42 x 12 months x 6 years = $45,822.44

you could have had a V8!

looking at that budget, the car number is way out of whack

also, kill the gym and spend $30 on a set of 15lb. dumbells.