01-17-2011 05:58 PM
I have 2 auto loans with Capital One, each with an interest rate of 8.75%, both with auto pay, so no delinquencies. One is due to be paid off in May of 2012, the other in January 2013. Both vehicles have 6-7K of positive equity.
I would like to trade the gas guzzling truck in for a more economical car. Car price is $17,300. Trade in value $13.500 with $6600 owed, so needing to finance 11K for new vehicle, and want to do a 36 month loan (which are the terms of one of my current loans, which was 11K to start with as well).
Capital one approved me, but at a rate of 13.5%..........what the heck? My credit is better than when I purchased the last car, and my income/debt ratio is unchanged. Straight up FICO score is 650, with discharged bankruptcy 7 years ago, and the bankruptcy was not discharged when I qualified for the loan at 8.75% with Capital One.
I would assume the higher interest rate is based on the fact that Capital One does not know that I will be paying one of the current loans off - is there a way to circumvent this, or will Capital One accept documentation from the dealer in regards to the trade in/payoff amount and lower the rate?
Any info would be much appreciated! Want to avoid asking the dealer for financing, since they certainly could potentially not be upfront with a good financing deal.
01-17-2011 06:02 PM
Does Capital one give you any special treats like gifts and free dinners? lol...
Just try your local CU, you will get much much much better rates... possibly less than 4%
01-17-2011 06:12 PM
Ha Ha on the gifts and dinner! Truthfully, I don't have the best credit, and I would have been happy with the same rate I have now, but my gosh, I have ONE late car payment on my credit from December 2007 (only 30 days) and 6 paid off auto loans, some WITH Capital One and I didn't expect to have an approval with an interest rate that increased by 5%!
01-17-2011 06:35 PM
I think you will easily get an approval from CU. Time to say buh bye to CAP ONE.
Did you run your FICO score here? How much is it?
01-17-2011 06:47 PM
Can you join a credit union and then apply for a loan right away, or join in conjunction with the loan application?
01-17-2011 07:02 PM
It works both ways I guess. depends on CU though, I joined mine only to get my 14.99% APR loan refinancing... applied same day and got approved.
01-17-2011 07:11 PM
FICO was 603.........Terrible because of my student loan balance - it's killing my DTI ratio I guess.
Maybe a better choice to hold off on purchasing a new vehicle right now and using income tax return to pay off small credit cards and pay the remainder on student loan. I just worry that gas will keep going up, and that it will be harder for me to get a good trade offer on a truck, with the economy being so bad.
01-17-2011 07:13 PM
603 is little low but CU's would definitely take a shot on you.. Do you race?
01-17-2011 07:19 PM
Raced powerboats for awhile, but I'm strictly a spectator now Anything on dirt is fun to watch......lol! Perhaps if I can get my new Zoom Zoom I can turn it into a drifter.....haha!
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