 TITLE: What Is a Precomputed Interest Loan? CONTENT: What to Do if You Already Have a Precomputed Interest Loan\n----------------------------------------------------------\nIf you've already taken out a precomputed interest loan—knowingly or unknowingly—it may be best to stick with it. Refinancing is an option, but it could ultimately cost you more.\nLet's take another look at the previous example to run the numbers and see why. If you were to pay just the minimum payment on a precomputed interest loan during the first two months, your loan balance would be $4,632. With the $393 refund you'd get when you refinance, your total interest paid on the first loan would be $165.\nAssuming your new loan has a 20% interest rate and a 12-month repayment period—you may find it difficult to find a new loan with a 10-month term—your new monthly payment would be about $429, and the total interest would be $516. Add that to $165, and the total interest between the two loans would be $681 compared to $558 if you had simply stuck with the original precomputed loan.\nIn this situation, it's best to repay the loan as agreed. But it may be worth it to find another loan depending on your repayment plan and the interest rate you can get with the new loan. END