Refinance an auto loan using a low interest balance transfer

If you can take a 6.5% 15k auto loan and change it to say a 4.99% life of the loan credit card balance transfer.

You will save money if you continue to pay the same payment as the car loan was.

This explanation will include a balance transfer fee of $200.

A credit card is a 7 year term that floats.

This is why the minimum payment will drop each month.

Thats the catch the credit card companies use.

A 20 k auto loan at 6.5% will have a fixed payment around 370 a month.

The credit card at the same rate will be 340 the first year but around 300 a month 6 months later.

All you have to do to accomplish saving yourself money, is to pay the same payment you had paid on your auto loan.

With the 2.5% difference in interest, you should pay the loan off a year or so earlier then with the auto loan.

A 200 buck fee is equal to 1.3% of your 15k balance.

So in the first year your loan interest cost you4.99 = 1.33 or 6.32%.

In the later years it will cost 4.99%.

To approximately calculate the average interest, you pay in a year, take 5% of 15k ie 750 and subtract it from 15k ie 14250

5% of 15k is 750 5% of 14250 is 712

Add 712 to 750 and divide by 2.

so 1462 by 2 is 731

divide 731 by 12 months and you have your approx monthly interest in year 1

repeat for year 2-7.

The only way this loan will cost you more interest then your old loan.

Is if you only pay the reduced monthly minimum each month.

I would simply pay exactly what I paid for the old car loan, If I could afford it.

The beauty of the credit card loan is you have an option to pay less in a tight month and stay current.

JUST DON'T BE LATE ON YOUR PAYMENT, EVER

You can also select a higher deductable insurance plan. REMEMBER the car is paid off the loan is on your credit card.

That saved premium can also be applied to the loan.