Hi,

I'm wondering if I can get some help/advice on refinancing my car loan.

I want to refinance the loan on my S2000. The lienholder is a local bank, www.Amsouth.com. When I bought the car I was 21 and had no credit history, so my father co-signed with me. The interest rate we got was 9.25% for 72 months with no down payment. The car was financed 100%. This was back in July 2000. My payment is $636 a month. I currently owe $26,321.39 left on my S2000.

I saw that bankrate.com has lenders that will give out lending rates as low as 5.90% @ 48months in my area (Jackson, Mississippi). Bankrate.com says that Amsouth currently loans out at 10.31% @ 48 months. I am about to turn 23 now. I've made every payment on time on my S2000 (its auto-drafted out of my bank account). In april 2001 I bought a house. My home loan was for $88K and put a downpayment on the rest (roughly $8500). I've made every payment on time for the home loan. I've also had a credit card and I've made every payment on time except once when I was 3 days late getting the check in the mail. That is my entire credit history.

I have a full time job with the state government and make roughly $30K a year. Do you think I have enough of a credit history that I could have the S2000 refinanced with just my name on the title at one of the lenders at bankrate.com and get one of the lower interest rates. Or do I not have enough credity history to qualify for one of these lower interest rates? Do you think I would save a good deal of money by refinancing my car loan if I got an interest rate like 5.90%?

Edit: I am looking more into the site and they are giving interest rates of 6.80% and such for refinancing (the 5.90% was for new cars) for 48 months for a 2000 model year. Playing with loan calculators I am hardly saving anything.

 

Have you tried your local credit union? I just got new car financing there for 4.9%.

Also something to consider when playing with your loan calculator: are you shortening your loan term? Your payment might not change, but to pay for less time, you pay less total. I would refinance just to pay less interest! It would chap my rear end to pay them that much interest when I could pay less elsewhere.

 

paying high percentage always sucks....

is there some reason you need to have the lien in your name only?

if you refinance for a shorter term, even with lower rate you may end up paying more per month, it is just that over length of loan you pay less interest total.

have you thought about just paying extra money each month? it will cut into principal amount making the overall interest payments lower since you will pay off loan ahead of schedule, and if you get in a bind and need the cash, you can drop down to actual payment amount without any problem. if you refinance and get higher monthly payment and get strapped, you are stuck making the payment without hurting credit history by skipping/missing a payment.

not sure if they do the same for cars, but when you refinance a home loan, there are charges for the paperwork on the refinance itself, making the breakeven point more difficult to calculate than just 9.25 to 6.8.

keith

 

I mistakenly financed my s2000 through the dealer before Farm Bureau Bank approved my auto loan. I spoke to the underwriter at Farm Bureau about my situation and she allowed me to refinance my loan. Their rates are great...5.8% with the option to drop down to 5.7% if you choose to accept their cashback visa/MasterCard. the only drawback is that they require automatic deductions from a checking/savings account for monthly payments. other than that, quick approval, no penalty for paying off loan early... it's a great opportunity.

 

Going from 9.25% to 6.8% for a 60 month loan would save you about $1500 in interest. If you shoren it to 48 months the savings would be slightly more. The big question is HOW DOES AMSOUTH FIGURE THE PAYOFF. If it's a "simple interst" loan then you are OK. If it's not and they use something called "the rule of 78" to figure the payoff then you are basically screwed as in that case that don't give you full credit in computing the payoff. In effect it's an early termination penalty and it's so one sided in favor of the lender that it would probably eat up any savings in interest.

 

its a simple interest loan and I can go to amsouth's website and look at what it is. Curently it is:

$26,321.39

 

Then I say go for it. I would think from what you said that you should be able to qualify.

 

i looked into it, and even a refinance for 48 months at 6.5% (about what these places are offering on a refinance) wouldn't save me anything, my payments would still be around $630 a month and i'd still be paying it off in the same amount of time.