Debt Pay-off Update

One of my biggest hunks of debt is my car loan...I purchased a new-to-me car in February of 2010, because I felt that my car at the time couldn't be relied on to last much longer (with 230,000 miles on both the engine and transmission). So, I bought a lightly-used 2008 Chevy Cobalt--a small car for a reasonable price. I also bought it in an undesirable color (canary yellow) to save a few bucks. But since it was my first major purchase, I couldn't get a decent rate without a consigner, and I wasn't about to ask my parents to cosign on another loan.

GMAC financing, through the dealership, was generous (italics indicates sarcasm) enough to give me a 72-month note at 9.84% APR. YOWSA. But, I needed a reliable car, and I wanted something I could drive to Michigan whenever I wanted, so I could see my beautiful new niece :)

It has now been a little over a year, and in looking at my finances and helping me with my debt pay-off process, J encouraged me to re-finance my car loan. It was something that had never even occurred to me as an option!! I contacted my bank (who, it should be noted, rejected me for a used car loan last year) to refinance. And voila, they offered me a 48-month note at 3.87% APR. WOOT!! That knocks almost an entire year off my car loan, and my monthly payments only went up by about $7 a month.

So if this isn't something you have looked into before, I highly recommend it. Rates are historically low right now, and if you have been a good payer on your current loan, they will have no reason to turn you down. Do it!!! It will really help you get out of debt faster, and you'll be paying less interest in the long run, even if it doesn't shorten your loan term like it did mine.

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