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helpmeout

Should I just pay off under toyota or refinance?

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Posted (edited)

So as you know me I have a car with a 28k note. I know very stupid of me but my car note is down to 5.9k and I have had the loan for 3 yrs and one month. I had original done a 7 yr finance and that was because if I ever needed some breathing room but I pay my car note in advance. Now my question is should I refinance to a 24 month loan?I have less then 10 months left if I keep paying the 600 or 9 months if I keep paying the 700 that I have been paying for the pass 2 months. My original car note is $450 a month but I dont want to pay what there asking me because I don't want to keep the loan forever. I am proud of myself for not rolling into another car note because I learned my less after 4 car notes. The only reason I ask is because I believe I saw an ad that says if I refinance with my NFCU that I can get $200 after like a month or 2 of payments and I could just put that $200 for the car to speed up the process even faster because I really want my car note done and done. I cant wait for the 10 or 9 months left. I am excited to get the car in my name and no more payments on it and I am only 24. No one has supported me and I been on my own so don't be saying anything like I been getting helped.

Edited by helpmeout

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The key number is the APR.  Don't refinance anything unless it's a lower APR.

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2 hours ago, hegemony said:

with that little time left I would just pay off the current note.

Yeah, thats what I been thinking to but that $200 is enticing. I just have 5.9k left can you believe that after I paid of 22.1k so far... Thats a lot of money that I could have used for anything else. 😪 Life lessons learned.

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With there being less than $6K remaining, you are not going to save enough to make it worth refinancing unless the current rate was north of 12% and the new rate was less than 2%.  However, even then, if you are tossing enough at it to be paid in full inside of nine months (which you should be since you are paying $700 per month right now), the savings will be negligible. 

 

IMO, pay the thing off and be done with it.  Put the extra savings into an account for the next time you either want to make a purchase of a new vehicle or want to engage in some other manner of luxury item...or even just want a good start towards retirement accounts or emergency savings.

 

Another option to look at is whether you have any good BT offers that you could use to kill the auto balance.  A 0% offer would potentially make sense even if there is a 3% fee with a cap....just make sure you have zeroed out the credit card balance before the go-to rate kicks in...

 

The other option, although I don't know if they still exist, would be to make the payment using a credit card.  When I had the loan on the Mercury, I was able to use the credit card to make the payment and reap the airline miles.  But, it has been more than eight years and I know the option does not currently exist with the Jaguar note...so that may no longer be something that is an option on the car notes...

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If you chose to go the refinancing route, find out if there will be any fees associated with changing lien holder on the title.  In my state it is $65, so your $200, becomes $135.

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One point I meant to address earlier...and it is for the benefit of those who might read this months down the road.

 

There is nothing inherently wrong with taking out a car note for $28K.  Where the stupidity element comes in is when it results in one being upside down due to rolling in the previous loan balance that remained after trade or, alternately, when the APR is stupid high...or worse, when both elements are present. 

 

I've got a note that was written for about $60K on the newest toy.  It was new and stickered north of $90K.  The car is never going to be upside down and the APR is low single digit.  I still shovel more at it each month than the bank wants and they properly apply it to the principal, just as I specify in the online payment form.  I am sure that some would quibble with either the vehicle or the amount, but it is not 'stupid' since it does not create a payment hardship and there was no situation that results in being upside down...

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2 hours ago, Glacier said:

If you chose to go the refinancing route, find out if there will be any fees associated with changing lien holder on the title.  In my state it is $65, so your $200, becomes $135.

There is no fees if you refinance.

1 hour ago, centex said:

One point I meant to address earlier...and it is for the benefit of those who might read this months down the road.

 

There is nothing inherently wrong with taking out a car note for $28K.  Where the stupidity element comes in is when it results in one being upside down due to rolling in the previous loan balance that remained after trade or, alternately, when the APR is stupid high...or worse, when both elements are present. 

 

I've got a note that was written for about $60K on the newest toy.  It was new and stickered north of $90K.  The car is never going to be upside down and the APR is low single digit.  I still shovel more at it each month than the bank wants and they properly apply it to the principal, just as I specify in the online payment form.  I am sure that some would quibble with either the vehicle or the amount, but it is not 'stupid' since it does not create a payment hardship and there was no situation that results in being upside down...

I meant I was stupid as in I traded upto 4 cars to get to this price because the car originally was 21k but I had 7k negative equity which made it higher and my credit took a hit because I traded 4 cars.... My apr isn't bad considering my age though because I got 6.19% and like I did mention no one helped me out with anything. My next toy is to try and get a mustang gt manual v8 after I finish this car(not trading this car in) under 13-15k.

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However, even then, if you are tossing enough at it to be paid in full inside of nine months (which you should be since you are paying $700 per month right now), the savings will be negligible. 


This.
 
IMO, pay the thing off and be done with it.  Put the extra savings into an account for the next time you either want to make a purchase of a new vehicle or want to engage in some other manner of luxury item...or even just want a good start towards retirement accounts or emergency savings.



Exactly.

I see a more underlying problem with the OP wanting to roll the whole shebang into a Mustang GT before the rest of his finances are on solid footing. Anyone?



Sent from my iPhone using Tapatalk

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On 5/5/2019 at 10:30 AM, damba said:

 


This.
 


Exactly.

I see a more underlying problem with the OP wanting to roll the whole shebang into a Mustang GT before the rest of his finances are on solid footing. Anyone?



Sent from my iPhone using Tapatalk

 

I bet u I won’t:). Gonna see on payday if I can pay a lot more because I just recently finished paying of my Bank of America card which had a balance of 987.

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I refi to nfcu and paid off after 3 months when I got $200 bonus (sometimes 250-300) depends if bonus is worth the new acct to you

Sent from my Redmi Note 5 using Tapatalk

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On 5/15/2019 at 4:08 PM, haydeno said:

I refi to nfcu and paid off after 3 months when I got $200 bonus (sometimes 250-300) depends if bonus is worth the new acct to you

Sent from my Redmi Note 5 using Tapatalk
 

Didnt you get taxed on the bonus money? I heard they tax you thats why I am trying to figure if its worth it. I don't really care bout the credit hit as it wont bother me because I am not interested in getting new loans right now anyways.

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10 hours ago, helpmeout said:

Didnt you get taxed on the bonus money? I heard they tax you thats why I am trying to figure if its worth it. I don't really care bout the credit hit as it wont bother me because I am not interested in getting new loans right now anyways.

From their website:

 

"Recipient is solely responsible for any personal tax liability arising out of this incentive" 

 

Being that they posted this, and it is applied into your savings account, I would bet it is treated as an interest payment and you will have tax liability.

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