Hey Everyone, a few years ago I learned of the PenFed Payment Saver and used it to buy my 2020 Jeep Gladiator. I’ll be at the end of my term in Dec 2022 so I’m currently looking at what my options are. The reason why I ultimately decided to go this route is because I knew I could pay slightly more than the payment each month and thus I’d have some equity in the vehicle at end of term. I also never expected that I’d want to stay in the vehicle and figured I’d just trade it on a new Jeep and make use of that equity.
Turns out I have 5k+ equity in my jeep but love it and would prefer to keep it. My question is, has anyone used the PenFed PS and come to the end of their term and how did they proceed? Worried that if I just do a straight refinance, I’ll lose out on the equity in the vehicle. Thoughts?
You own the vehicle. I would think you either pay off the balloon payment or find a new loan to refinance or sell it and payoff- keep any equity. The equity stake in it should not change at all.
You can refinance a payment saver loan at any time You will not lose out on any equity, as it’s reflected in your loan balance. It would also be possible for you to extract the $5000 in equity during the refinance, if you wanted to convert that to cash.
On the PenFed website, under your payment saver loan, you can request a payoff letter. That letter will have the total amount required to settle the loan with Penfed. Take this amount and add $5000 to it, use this new amount when when you apply for a refinance auto loan.
You could work with Penfed on the refinance loan, but they no longer offer payment saver, so you would have to go into a traditional term loan (ie: 60, 72, 80 mo). You could also work with any other bank (ie: DCU), since Penfed does not have the lowest refinance rates, or if you want to find another payment saver loan.
You should be fine (approval-wise) as long as your loan amount does not exceed the market value of the vehicle.
“Extracting” equity means taking on a bigger loan for your next refi and obv paying more interest.
Question is, do you want to? You seemed to be happy paying down your current loan and watching the balance fall off quicker than the original schedule.
Great point and being that I love the vehicle, and that my payoff will only be around $32k for a Rubicon with 40k miles on it, I’ll probably just search for the best option to refinance my balloon balance.
