We need to refinance a loan for $20,000 because the payments are only paying the interest rate of over 12%. Part of the loan is land. What is our best option?
There are many moving parts to this question. #1. You do not need to refinance, because it is an interest-only loan. You can simply start paying extra to go towards principal. Your interest-only payments are $200 a month now and once you start paying some towards the principal, the interest payments will go down very slightly as well.
#2. Refinancing a $20,000 loan that is partly secured by land may not be so easy. Your local bank may do it, but they may offer only a 2-3 year fixed rate, which will likely be interest-only as well.
You should always be entitled to pay something towards the principal balance on any loan. | 03.01.16 @ 22:13