Is it wise to refinance?

Question

I just purchased a new car, the payments are extremely high as I am a first time buyer. I know I won't be able to refi for about 3-9 months but is it wise to do?? When I think refinance I think more debt.. please let me know

Answer 1

Okay, first off there is no time restriction on refinancing. You can refinance your auto loan at any time. Actually the faster you do it the better. The start of any loan is more interest than principal (which is why my people end up upside down in the beginning). If you feel like your credit has gotten better to allow for refinancing you can always apply to see.

Best of Luck!

Answer 2

Not necessarily. Many people refi to get their pay off sooner. So their payment will and sometime be higher, but they pay off the car 6-12 mo earlier. This is so that there is less interest. You see, that interest is straight up profit to a bank. I don't know about you, but I hate giving my money away. If you refi for the same number of months you have left, then you may get a lower interest rate & monthly payment, but you still will be in debt for the same period of time. I bought (financed) a Nissan in June. My payment is actually $6 cheaper per month. I financed it for 48 months. This is the 1st time I have financed for 48 mo. That is b/c my interest is considerably lower. My last car was 8%. Now this Nissan is 6.25%. Granted it's a cheaper car, but the point is I will own it in 48 mo instead of 60 mo. So go ahead and talk w/ your bank & compare. This is business and they know it. Talking to your banker is free and very informative. I recommend you conduct that business face to face so they know you do mean business. Ask your banker about refi now. Don't wait. Your giving money away when you may actually be able to save money. Good luck.