Question: Should i refinance or pay towards the principal?

(Posted by: Deadboy on 2010-03-09 10:29:25)

I bought a truck before my income tax came in. Whenever it comes in I'm thinking about refinancing. Is it better to shop around and find a better rate (if possible) or to just pay the money toward the principal in one lump sum? @wg0z: Well thats the problem is I can't really afford the current note. I need to lower it some how. I owe $22, 000 and I'll be able to put down around $8, 000. I was conned of course by the salesman to go ahead and get it and they would give me 90 days before my first payment to get time to refinance. Now it's time to make that first payment and my income tax more than likely will not be in. I claimed the first time home buyers and its taking longer than expected... @ Dazy: Do you have an example of what kind of difference it would make? I financed for 60 mo/ $473. Interest rate was 7.5ish. lol. I'm financing a little over $22, 000. I just would like to know what kind of difference it would make. If hardly any then I could do something else with the money. But I NEED lower payments. Thanks.

Posted by: Dazy on 2010-03-09, 10:50:07

Just pay down the principal. It costs money to refinance and, presumably you have a relatively short term (5 yrs or less), so you get the most benefit by paying down the note.

Posted by: wg0z on 2010-03-09, 10:40:30

There are costs associated with a re-fi. there may be loan origination fees, and if nothing else there is time and inconvenience involved. probably mileage too. usually cheapest/ easiest to just get the current loan paid off ASAP.

Posted by: Cody on 2010-03-11, 17:15:41

Http:/ / loanrefinanceadvice.com/ refinance-programs/ has everything you need to know about refinancing, refinance rates, and what steps to take if you are interesting in refinancing.