I recently moved into a new place/city and am looking to free up some room in my monthly budget. For the first time in about 3-5 years, I shopped for new car insurance and then looked into an auto loan refinance.
My current loan is 60 months at 4.75%. I got approved for a much better monthly payment through my bank (BoA) that would cut my monthly payment in half basically, but the interest rate is 0.94% higher than my current loan. I thought it was a little odd since my credit has improved since then. I saw what it pulled at and I know that it's higher than what I initially applied with at the dealership.
I selected the 60-month option but am eager to see what the payment/rate would be at 48 months. I know that going the refinance route means I'll end up paying more interest especially if the APR is higher. I'm estimating that I probably have around 28-30 months left on my current loan based on my payoff amount.
I'm interested in knowing if I'm missing something and if this could end up saving me money or if I'll just unnecessarily spend more in the long run. It will be nice to have a bit more in my monthly budget now, so that is worth considering.