The credit card that I recently paid off just offered me a balance transfer offer of 0% for 12 months. I decided to take advantage of it to refinance my car loan. I had a good interest rate on my car loan, but it wasn't as good as 0%, obviously. Plus, I'm trying to buy a house in the next 6 months, and the minimum payment on the balance transfer is $100 per month less than the car payment, so that's an extra $100 I can put toward a mortgage.
Obviously, I'm going to pay more than the minimum payment, but mortgage eligibility is calculated based off of the minimum, so the more I can lower my minimums, the more house I can buy. And every payment I make lowers the minimum even further.
Additionally, now that I own my car in full, I can drop comprehensive and collision insurance, saving me $500 per year. And I got a happy surprise yesterday as well. When I bought the car back in January, I decided to buy gap insurance as well. Gap insurance pays off the difference between the loan balance and the value of the car in the event that the car gets totaled. I figured it was a good idea because I was underwater on the car loan from day one. Since I paid off the loan, the lender canceled the gap insurance, and I'll be getting a $493 refund because the gap insurance was originally for 4 years (the life of the loan), but I paid the loan off in 9 months, so I get the remaining premium back.
The savings on car insurance now that I only have liability coverage paid for the balance transfer fee. The gap insurance refund will go right to the credit card to pay down the balance.
One step closer to freedom!
