Car Loan Refinancing — 12% to 6%
Refinancing from 12% to 6% — what you actually save
Monthly savings by loan balance
| Loan Balance | Old payment (12%) | New payment (6%) | Monthly savings | Total savings (60mo) |
|---|---|---|---|---|
| $10,000 | $222 | $193 | $29/mo | $1,747 |
| $15,000 | $334 | $290 | $44/mo | $2,620 |
| $20,000 | $445 | $387 | $58/mo | $3,494 |
| $25,000 | $556 | $483 | $73/mo | $4,367 |
| $30,000 | $667 | $580 | $87/mo | $5,241 |
| $35,000 | $779 | $677 | $102/mo | $6,114 |
| $40,000 | $890 | $773 | $116/mo | $6,988 |
60-month remaining term assumed. Actual savings depend on your balance and remaining months.
Is a 6% rate drop worth the paperwork?
At 6%, this is a refinance worth doing. Most lenders charge no fees on auto refinancing. Free application, 24-hour approval, and $73 back in your pocket every month. The only reason not to: if you are within 12 months of paying the loan off.
Who this refinance actually makes sense for
A 6-point drop from 12% to 6% is available to borrowers whose credit has improved from subprime to prime. This is the refinance for the buyer who financed under financial pressure and has since stabilized their credit profile.
The ROI on this refinance is among the highest of any financial action available at this income and credit level. On a $22,000 balance with 48 months remaining, you save $70-80/month and $3,400-3,900 total.
6% is a reasonable market rate for a prime borrower (700+) on a vehicle with a clean title less than 7 years old. If your score has crossed 700 and your vehicle qualifies, you likely qualify at a credit union or online lender today.
Run your numbers
See your full Ownership Score with the new rate
Frequently Asked Questions — 12% to 6%
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