Bob and I closed an auto loan refi today. We refinanced it with a local credit union and saved over $100 per month on the payment. Here's what we did. We went from a 5% loan to a 3.45% loan. For newer model years, rates are as low as 2.99%. Our monthly payment went from $397 pay to $274. We paid $5 to join the credit union, plus $75 to the tax collector and $29 for doc stamps. So it cost us $109 and about an hour (half an hour giving our application to an 800#, and half an hour today at the local branch to sign everything) to save $3,293. That is figured by taking 30 new payments at $274 which is $8,220 compared to our original loan which had 29 pymts left at $397 which is $11,513. The total time it took was one week and one day.
A side note is that I didn't realize how easy it was to join a credit union. We were eligible to join the one we used because we lived or worked in a zip code that they served. We didn't have to work for any particular employer or be members of any affiliated group.
So-- if you have an auto loan, call a local credit union and ask if you could lower your rate. They can tell you right away if it is worthwhile and most of the time they can qualify you on the phone. Have your personal credit info handy, your exising loan info, and your vehicle info (make, model, vin # and mileage).
Let me know with a post if you try this and what happens! Post or e-mail me at kcormiercpa@gmail.com with any questions.
-Kathy
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