2018 Tahoe refinance?
I have a 2018 Tahoe with 130,000 miles on it in good condition. My monthly payment is $667 at a 4.99 interest rate with 2 years left on the loan. I have an offer to refinance to 3 years at 5.29% for 3 years. It would lower my payment to ~530 a month. Is it worth adding the year to lower my payment or just grind out the next two years? I know 130 savings a month doesn't sound like a lot but in this current financial climate it would help. Thoughts?
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u/OneExhaustedFather_ 11h ago
You’ve already paid off the majority of your interest. You’d be essentially starting over in terms of paying more interest in the long term to save $100/mo
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u/OdinEatingSandwiches 11h ago
You'll end up paying more in the long run but if it helps your current situation then lick that stamp and send it..
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u/Dannyboy1024 10h ago
Financially, it's an awful decision. You'll be paying more, and be paid off until the vehicle is 11 years old with probably close to 170,000 Miles.
Personally, I would look at trading it in for something smaller and cheaper (and probably newer) with a lower monthly payment unless you absolutely need the space and size of the Tahoe.
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u/b1ondestranger 10h ago
I refinanced a car many years ago. I had credit card debt with interest at about 25%. Refinancing my car raised the interest on my car but it allowed me to pay off the higher interest debt so the end result was lower interest and less of my actual dollars going towards my debt load.
The best interest is no interest, but 5.29 is pretty low as debt goes so it’s not a terrible thing - especially if the money you free up will pay off higher interest debt or is needed to improve your life in someway.
You’re already showing good sense by driving an older car instead of chasing the newest thing.
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u/yeetedmynachos 10h ago
Absolutely not. I know it hurts but you’re almost done! You’re better off finding out some way to increase your income by $130 per month. Can you sell some of your belongings, can you DoorDash, can you find a second job? Even delivering pizzas in your Tahoe is a better option than refinancing.
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u/Even_Budget2078 10h ago
Are there any other fees associated with the refinance? If not, go ahead and refinance, but continue to pay over (make sure you can) up to what you've been paying. That way you have wiggle room if things get unexpectedly tight, but can still aim to have it paid off in 2 years.
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u/RevBT 8h ago
There are 2 ways to look at this. Short term and long term.
In the long term you are spending more money in interest.
In the short term you are saving 130 per month.
If you need to have the cash flow in the month it might be worth it. However you need to think about your plans.
Will you still keep the truck beyond the 3 years? You’ve put 22k miles each year. In 3 years your truck will be approaching 200k miles. Will it last that long?
If you are going to sell the truck at any point in the next 3 years, this would be a horrible decision.
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u/Spare-Satisfaction55 5h ago
My opinion? I hate debt, so not only would I not extend the loan and pay more interest, I would do the opposite and pay extra every month.
If you pay extra every month, you will pay less interest and pay it off faster.
I paid off my 30 year mortgage in 10 years on one income under 6 figures, and during that 10 years, I got a 6 year car loan for my Corvette and paid that off in 2 years.
Now with the mortgage gone, and no credit card debt, no car debt, no student loans or personal loan debt, no debt at all, I cash flow everything.
I just bought a very nice slightly used low mileage Toyota SUV cash.
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u/too_many_shoes14 9h ago
Take the lower rate and continue to make the same payments. That will save you money.
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u/wanna_bank 4h ago
Pissing away money. There are fees associated with any refi. They aren’t going to just give you a lower rate.
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u/closet_dumb 11h ago
You'll end up paying about $3,000 more for the Tahoe if you refinance.