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Folks,

I am looking to refi my car loan. My current interest rate is 5.74 for 60 months. That was part of the deal to get the car at the price. Can you suggest any institution I can look at to refinance my loan ? I have excellent credit.

Thanks
 

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Folks,

I am looking to refi my car loan. My current interest rate is 5.74 for 60 months. That was part of the deal to get the car at the price. Can you suggest any institution I can look at to refinance my loan ? I have excellent credit.

Thanks
if you have excellent credit how did you get a 5.74 rate... that is horrific!
Now to get the better rate and save the $ on the car you’ll have multiple credit pulls ...

justgo online where you bank for a customer rate and refinance.


we have 830+ fico and got 1% on our crv via bank of america
 

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Dang, ouch. When I bought ours last March, we got in on the 0.9% financing. :cool:
It sounds like the original poster may have been offered "dealer financing" which sometimes is NOT through Honda promotions, but rather through some local arrangement with a bank... and in cases like this.. they generally are NOT the best rates.... because they will essentially finance for just about any owner... so they bake in the higher risk pooling in their rates AND kick back some of the money to the dealer as well. It is often coupled to a buyer trying to negotiate a low price deal, and the dealer will "relent" if the buyer agrees to use the dealers offered financing. It is predatory in nature, and not even legal in some states.

Then again.. it could have been all about the original posters credit score too.

Hard to know for sure, but if it was credit score driven.. moving to different financing may not get the original poster much relief.
 

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Ouch.
They forced a price to you if you would finance the car at over 5%. That's predatory lending.
Don't typically know how refinancing a car goes but theyre usually at above average rates as opposed to buying new.
Mine is at 1.9% for 60 months and bought my EX at 25.9k before taxes.
 

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Good luck on that situation. You are now already paying one set of finance charges. If you re-finance, no matter the rate, it will add another set of finance charges plus some other fees to the total, on top of what is already there.
 

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Lets be positive... look into digital federal credit union out of Massachusetts. You can typically make a 10 dollar donation and become a member. That is how I became a member there in 2016. I found out about them through the myfico boards. I believe I can refer you there and you can avoid the donation. You typically only need 700 or higher to get top rate, which last I checked was around 2.49% before the pandemic.. is it .9 or 1.9? No but it will still save you some money. They also offer a .5% savings if you move your direct deposit there. If interested send me a pm and I can try to help. Good luck!
 

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I agree with the local credit union.... Look online at their current rates. Some credit unions in my area, they incentivize automotive refinance loans. Sometimes they give you a rate discount for choosing them, I've seen where they'll give you like $200 bucks for refinancing with them. But shop around and find a good rate for you.

My little bit of advice as I used to work in banking, try not to over extend your loan. Your original loan was for 60 months, I don't suggest that you refinance for another 60 months unless you ABSOLUTELY have to do so to keep the payment down. Example: Since your original loan was 60 months, let's say you've made 20 payments on that loan. Try and refinance for 36 months to try and keep your payoff date the same. Reason being, you don't want to over extend your loan, as your vehicle gets older and with more miles on it, the vehicle will have less value in it. If something were to happen to it, you would likely owe more on it than it was worth. Plus, this shorter term will save you on interest over the life of your original and refinance loan combined.

Now if you can't avoid choosing a shorter term (monthly payment too high, credit union doesn't offer shorter term at given rate, etc.) consider GAP Insurance through the lender or through your insurance provider. Small price to pay for what this coverage offers. Do a NADA or KBB value on your car to see if GAP insurance would have any benefit to you in your current situation.

Good luck! 😁
 

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Good luck on that situation. You are now already paying one set of finance charges. If you re-finance, no matter the rate, it will add another set of finance charges plus some other fees to the total, on top of what is already there.
"Add another set of finance charges"? There's no "on top" unless the loan was a beyond-awful one where the whole interest amount is part of the principal starting day one. (That's usually reserved for bottom-of-the-barrel subprime; it's not super-common.)

And auto loan refi's rarely incur fees.
 

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Unless you are trying to refi with the same lender you already have... example your credit moves up a tier so you try to get a lower rate with the same lender you may see an origination fee or some other fee for refinancing.. but generally if you are seeking to refi a loan from another lender you generally wont see a fee sometimes a credit or perk instead
 

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Refinancing has a higher rate...We have financed with PenFed in the past:

Looks like the re-fi rate is sub 3% - you do not have to be military to join...just open a savings account with $20.00.

Really easy to work with.
 

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Ha! Go ahead and jump on in then! Some folks have to learn the hard way. This swimming hole is not just full of toe-biting turtles, it's full of water moccasins too - the snakes that swarm.
 

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Yeah, a little confused on what you're referring to when you say "another set of finance charges". In all my years as a Banker, I have never seen someone go in to refinance a loan and pay more on that loan. I personally have refinanced a loan and didn't end up paying "another set of finance charges" as you say. I encourage folks to refinance as it can save them a substantial amount of money. Especially right now, rates are low. But just be aware that lenders are looking at applicants closer than usual just due to the circumstances the global economy is in, but you can accomplish your goal. Just shop around for rates by checking the lender website. Good luck and be well! 😁
 

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Good luck on that situation. You are now already paying one set of finance charges. If you re-finance, no matter the rate, it will add another set of finance charges plus some other fees to the total, on top of what is already there.
Are you SURE you are not confusing refinancing a home loan with a car loan?
 
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With auto loans through dealer financing, once it's done, all charges and any fees on the paper, except TTL and interest, become a part of the principal, unless you elected to pay all those separately. Most people don't, especially since predatory lenders forget to mention the option. And you can bet they have loaded that paper down with every possible dealer charge and fee. When you refinance, the amount you are refinancing is the whole principal, minus whatever you have paid against that principal, which won't be much this soon after origination. Of course, the lender loads up the interest as high as possible at the beginning of the term, too. If your new lender is a bank, they may be able to offer some mitigation, but you are still financing the whole principal, and I doubt that any such savings would be near enough to break even. So it may be good to save some on the back end, but as far as the front end is concerned, the damage is already done. At least that's how it worked when I was a new car salesman.
 

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Are you SURE you are not confusing refinancing a home loan with a car loan?
More likely just having some sort of flash back from 30+ years ago.

Used to be... there could be pre-payment penalties on early repayment of a vehicle loan, particularly junk predatory loans often peddled by car dealers. But those days are long gone.

Used to be there could be a "loan origination fee" of some kind on vehicle loans.. which is probably what he is "flashbacking" about. These are still common on home loans, and equity LoC loans... but are pretty much unheard of in consumer vehicle loans now days.

As far as I am aware.. both of the above are illegal in virtually every state now days... so again... "old gummer" flashbacking at play here.

The original poster accepted a higher than market loan rate... as part of a negotiated vehicle price. Not uncommon, but easy to remedy by simply paying off the loan in full. The loan holder has no idea where you got the money from to pay off the loan... so if you secure a new loan to pay it off... it is not visible to them, nor would they really care.

Now.. if the loan contract came with an early-payoff penalty clause.... then that would be incremental in cost... but again... I don't know of any state that allows these any longer. I guess one of the more conservative southern states could still permit them.. then it becomes a question of if they are even allowed under federal law.

As for what was included in the loan amount, the original poster did not indicate. Most loans allow adding in all expenses associated with a purchase... but you will pay these one way or the other anyway.... so the only downside is you end up paying interest on those as well since they are part of the loan principal. Some owners only finance the sales price of the vehicle and not additions like extended warranty, taxes, registration, etc. It's up to the buyer really, and any exclusions required on the part of the loan underwriter.
 

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On auto loans, finance charges are accrued daily in a “per diem” amount determined by the principal balance owed multiplied by the interest rate. On a finance contract, a finance charge is disclosed to the buyer. That amount does not automatically become part of the principe balance. That amount shows the amount of interest paid over the life of the loan assuming all payments are made on time and in full over the duration of the contract. That amount is not correct if you choose to payoff early. Refinancing a loan is a another form of “early payoff” as you are paying off “Loan A” with funds supplied by “Loan B”. Refinancing is a good idea!
 

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Years ago, probably 30 ...maybe longer... there used to be a thing called the rule of 78s...I wont to go into all the details but that basically amounted to when you were paying off a car loan you were only paying interest at first and took a very long time to when you even touched the principal. I believe that's what kloker is referring to. That is no longer the case in most loans/states.

Rule of 78s
 
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