: Refinancing a vehicle, longer term with extra in the kitty, or shorter term and just make scheduled payment? My truck is currently financed with k owing @ 9.9% interest over 72 months = 5/month I've been approved to

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Refinancing a car for anything other than lowering the rate is not a good idea. Keep the same term, or take a shorter one.

Remember that unlike real property, a car only loses value.

So when you make your payments on your 84 month (!) loan, those payments are amortized so that the interest is front loaded. The problem is, when your car gets totalled around month 24, insurance will generally only pay what the car is worth, and you'll owe more.

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It really depends on the answers to two questions:

1) How tight is your budget going to be if you have to make that 0 payment every month?

Obviously, you'd still be better off than you are now, since that's still cheaper. But, if you're living essentially paycheck to paycheck, then the extra flexibility of the 0/month option can make the difference if something unforeseen happens.

2) How disciplined (financially) have you proven you can be?

The "I'll make extra payments every month" sounds real nice, but many people end up not doing it. I should know, I'm one of them. I'm still paying on my student loans because of it. If you know (by having done it before), that you can make that extra 0 go out each and every month and not talk yourself into using it on all sorts of "more important needs", then hey, go for it. Financial flexibility is a great thing, and having that monthly nut (all your minimum living expenses combined) as low as possible contributes greatly to that flexibility.

Update: Another thing to consider
Another thing to consider is what they do with your extra payment. Will they apply it to the principal, or will they treat it as a prepayment?

If they apply it to principal, it'll be just like if you had that shorter term. Your principal goes down additionally by that extra amount, and the next month, you owe another 0.

On the other hand, if they treat it as a prepayment, then that extra 0 will be applied to the next month's bill. Principal stays the same, and the next month you'll be billed 0.

There are two practical differences for you:

1) With prepayment, you'll pay slightly more interest over that 60 months paying it off. Because it's not amortized into the loan, the principal balance doesn't go down faster while the loan exists. And since interest is calculated on the remaining principal balance, end result is more interest than you otherwise would have paid. That sucks, but:

2) with the prepayment, consider that at the end of year 2, you'd have over 7 months of payments prepaid. So, if some emergency does come up, you don't have to send them any money at all for 7 months. There's that flexibility again. :-)

Honestly, while this is something you should find out about the loan, it's really still a wash. I haven't done the math, but with the interest rate, amount of the loan and time frame, I think the extra interest would be pretty minor.