Does Refinancing Make Sense?
Have you ever considered refinancing your auto loan? Even if it decreases the rate by a few points, it could make a huge difference in monthly payments and the amount paid over the life of your loan.
For example:
You purchase a vehicle for $25,000 at 3.74% APR for five years and then you see that Bethpage is offering 2.74% APR* one month later.
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Approximate Loan Comparison
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Current
|
Bethpage
|
|
Approximate Remaining Loan Balance
|
$25,000
|
$25,000
|
|
Annual Percentage Rate
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3.74% APR
|
2.74% APR
|
|
Length in Months
|
60
|
60
|
|
Monthly Payments
|
$457
|
$446
|
|
Total Interest
|
$2,016
|
$1,464
|
|
TOTAL PAID
|
$27,016
|
$26,464
|
The refinance kept you in a 5-year loan, lowered your monthly payment, and saved you $894.42 over the life of the loan.
When does an auto refinance make sense?
- You need to lower your monthly loan payment and/or extend the loan term
- Interest rates for auto loans have gone down since your purchase
- Your credit score has improved and you qualify for a lower rate
- The rate your dealer gave you is much higher than your credit union
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