Just one week after closing on our mortgage refinance, my wife and I got another big break in our expenses.
I always make it a point to review a few expenses each year to see if I can cut them down. This often involves a lot of work and research, like with the mortgage refinance. But sometimes, savings come from unexpected places—like junk mail.
A local credit union sent me a “pre-approval” notice for an auto loan refinance. I guess when it comes to refinancing, it’s true that when it rains, it pours.
So what caught my eye about this particular letter? An interest rate of 2.25%! This was much lower than the 4.59% I was paying at the time. Reducing the car payment had been on my to-do list, but I just wasn’t sure how to tackle it.
Of course, I was skeptical. Was there a catch? Would there be hidden costs? Would the loan term be ridiculously short, like 12 months?
Despite my doubts, I decided one phone call wouldn’t hurt.
To my surprise, the offer was genuine. The 2.25% rate applied to any loan term up to 6 years, as long as you had a good credit score. The credit union was a well-regarded, local business.
Were there exorbitant closing costs? No, just $15 for the title transfer. Did I need to open a new account with a huge balance? Well, an account was required, but it only needed a $5 opening balance.
All things considered, there was nothing left to question. It was time to seize the opportunity.
New Payment Details:
With minimal effort, here’s what I saved:
– My monthly payment dropped to $421.77 from $450.84.
– Interest on the loan decreased to $902.84 from the $1,872.08 remaining on my previous loan.
– The loan term increased to 48 months from the 47 payments I had left.
It Pays to Look Around:
Every expense reduction I’ve achieved began the same way: by asking if I could be paying less. Whether it’s the mortgage, car loan, TV, phone, or auto insurance, it all starts with a little curiosity about better offers.
In the case of the auto loan, a quick visit to the credit union saved me $30 a month. Understand that the current low interest rates are unique and may not last. Even if you’re not actively considering refinancing, I strongly encourage you to explore available deals. Act now while the opportunities are favorable!
