Ask Experts Questions for FREE Help !
Ask
    shiv01's Avatar
    shiv01 Posts: 3, Reputation: 1
    New Member
     
    #1

    May 5, 2008, 09:26 PM
    Car Loan - Should I close or renegotiate?
    Hi Experts,

    I have a car loan taken at 8.4% 5 months back... Suggest me the best possible method:

    1. To close off the loan by paying the balance amount (I guess, I just need to pay the principal alone, correct? Do they charge anything extra? )

    2. Or, to renegotiate for a lesser rate - with the same bank or a diff bank?

    Suggest me a suitable path forward, as I am really confused with what to do?

    Looking forward to your valuable advise,

    Thanks in advance,
    Shiv.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
    Expert
     
    #2

    May 6, 2008, 09:12 PM
    Either is better than paying high interst rates.

    You need to read your loan paper and/or talk to the bank about any early pay off charges.
    oneguyinohio's Avatar
    oneguyinohio Posts: 1,302, Reputation: 196
    Ultra Member
     
    #3

    May 6, 2008, 09:27 PM
    I agree with Fr_Chuck about finding out if there are any early payoff fees... If there is, it may be the fee is only on the final payment. If that is the case, I would pay off all except for a hundred dollars, then pay off the hundred dollars perhaps the next month if possible. By doing that, the penalty would only be a percentage of the last payment... if your contract is written in those terms.

    Some banks don't have any early pay off penalties, so you'll want to check into that.

    If you have the cash, you have a great option of paying it off and not owing interest. You also have more leverage with the bank to refinance at a lower rate.

    Another thing to watch out for is loan origination fees or closing costs that might be added in if you refinance... try to find a bank that will not charge those fees if you can.
    lfnj68's Avatar
    lfnj68 Posts: 8, Reputation: 1
    New Member
     
    #4

    May 7, 2008, 07:36 AM
    With interest rates being what they are on deposits, you are better off paying off the loan rather than incurring the interest charges you are currently paying, assuming there are no early pay penalties.

    If you are interested in refinancing still, be aware that while the prime rate is down, most banks have taken huge losses on loans and are a bit risk adverse right now. As such, the rates charged on loans are trending up.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Should I get a 401 K loan or Home Equity loan [ 4 Answers ]

I owe about $ 25,000 on various credit cards with interest ranging from 17 % to 30 %. I am barely able to make the minimum payments. In addition, I owe $14,000 ($ 500 a month) on the car with 7 % and 3 years to go. Because I have bad credit, I was able to get one bank to offer me a Home Equity...

401K Loan vs. Home Equity Loan [ 3 Answers ]

I need $50,000 for a kitchen remodel. I can get a 401K loan 5 yr term 9.25 interest - total payments add up to 62,000 or so with a monthly payment of roughly $1,050. That payment is is tough on my current budget so I was considering a Home Equity Loan with a longer term. I know there are a...

How do I close on a construction loan when there is a lien on my property [ 1 Answers ]

I am 10 months pass the maturity date for my construction loan paying interest each month. I am litigation with the builder of my new home, he has put a lien on my home. I want to close on the construction loan and enter into permanent financing without paying the lien. We are in the process of...

Gas line & dryer vent pipe - how close is too close? [ 1 Answers ]

I'm rerouting the gas dryer vent piping so that it will inside the adjoining stud wall. At the top of the wall the vertical exhaust pipe will be within an inch or two of the horizontal running copper gas supply line. Question - is there a minimum distance that the metal dryer exhaust pipe must...


View more questions Search