Capital One Auto Refinance

[Shockedimpy]

Hi guys,

I'm on the path to rebuilding my credit. I got a 2013 Civic Si through Honda Financial.

Term length: 72 months
10.25%
59 payments left
$416 per month

Captial One refiance offered me:
60 month
6.5%
$376.83 per month term

Is it a good idea to switch from Honda Financial to Capital One? Am I missing something with this? Should I look out for anything or does this seem like a good idea to switch over? I currently pay more then what my loan amount per month anyway ($600)

[Shockedimpy]

Also, my mother cosigned with me. I'm not sure if the car stays on my credit report because I'm not the sole signer. So would being solo with Capital One boost my credit score?

[Anonymous]

It sounds like a good idea! You are saving money, your payments are going lower, and your interest rate is almost cut in half. The only thing people say not to do with refinancing is extend your term, but in your case it's only for a month since you have 59 months left and you are refinancing for 60 so I don't think that's much of a problem in your case. Have you looked into what rate/payment you would have if you refinanced into a 48 months term? Your payments might stay the same or in some cases be a little higher but you will be paying the loan off a lot earlier and will be saving a lot on interest, but if you want to lower your monthly payment then I think what you have seems like a good plan. I'm not sure how a auto loan just in your name will affect your credit verses a joint auto loan but your old joint auto loan will stay on your reports as paid off with a 0 balance and you will have Capital One reporting a open auto loan just in your name. Having the auto loan just in your name would seem to be better in the long run just in case you ever wanted to trade the car in or sell it (you wouldn't need your mother to do so) and I would that it would look better to future auto loan lenders.


I have been thinking about applying for Capital One to refinance. If you don't mind me asking was the approval instant? And if it was does it give you the rate and term asap? The only thing is in my case I would be losing my gap insurance that I only paid $199 for through Navy who I financed through and will have to find it from an other place since Cap One doesn't offer gap. I am also in a 72 month term and really want to refinance into a shorter term which is why I have been thinking about applying with Capital One. Did you have a good experience with the application process?

Congrats on the approval!!

[Kathy4NU]

YOu might want to check out DCU.  There rates are below 2% right now.  Just another option.  They did a single pull on Experian for me.  The total transaction took about 4 hours.  Check was over nighted and I had it the next day by noon.

[Shockedimpy]

Im still sort of confused on it. I did call to see if I can decrease th term length and they did offer a 48 month at $456 per month (6.5% APR still). Do you guys recommend me switching and accepting it? 

I would be going from a 10.25% $416 a month payment for 72months (59months remaining). I also pay an extra $150 per month anyway.

[Shockedimpy]

Yes, the application process was very quick. I submitted it and heard back within 15min via email. And it included my term length, % and payment amount. I was unaware that you loose the GAP insurance however. I also have GAP...What would my option in this case?

[EddieK]

One other thing to consider, are you on your mom's insurance policy or on your own?  If you finance the car into your name only, you will have to have insurance in your name only.  If that's already the case, the point is moot, but if not, something to think about.

[Anonymous]

Did you finance through the dealer? If so you might have The GAP insurance through a different company then who financed you and some GAP policies you can keep no matter what bank you are financed with. The amount of GAP is just included in your financed amount. If the actual bank you financed through offered you GAP and refinanced then you might lose it and have to find it from a different company (I'm not to certain on this since this is my first car I ever financed but after researching the crap out of it that's what I got lol) basically some GAP policies you can keep if you change banks and some you can't, the best thing to do is call the company who is offering the GAP insurance and ask them directly. If you have to cancel it, it will be refunded (they normally prorate it) and if you financed it with your car then the amount would be refunded to the principal of the loan.


As far as the term, if the interest rate is the same for 60 or 48 months then I think it wouldn't matter (especially if you are paying extra a month) basically if you can afford 48 months plus pay extra a month then that would be a way to go since you will be paying it off before 48 months and saving a lot of interest but because both terms have the same interest rate and if you pay the same amount (with the extra payment) a month on either term it will end up coming out even. (If that makes sense) for example if you pay $500 (your minimum plus extra) a month on the 48 month term or 60 month term in the end it will come out even on how much money you paid out in interest since the rate is the same on both terms. If you want the lower minimum payment a month as a cushion then go for 60 months but of course keep paying extra when you can but if you want to make sure you pay it off as quickly as possible then go 48 months that way the minimum is higher which will ensure its paid off earlier.

I'm glad to hear that the experience was good! I would also check into DCU if you are interested in that. I was recommended them too. I haven't applied anywhere yet but DCU does (based on a lot of post on this board) give out lower rates. They also offer GAP insurance and if you bought gap through the dealer then the price you paid is probably a little high and if you finance through DCU you might be able to get it cheaper and cancel the other policy. The other poster also gave great advice too about the insurance. Thanks so much for sharing your experience. Do you have to give Capital One any documents? If so you can upload them right online (at least what I thought)

[Shockedimpy]

Thank you for the amazing posts...so I contacted Honda and the GAP was purchased from a 3rd party. So it goes where I go. Which is a excellent news. I will be accepting Capital Ones offer. But like you said, I'm stuck on the term length....

Because I roughly pay $585-600 a month ($416 monthly), so an additional $150-175 extra per month. I'm thinking of doing the 60 month term because it does seem to wash out. My plan was to pay $600 per month for next year, which should bring my $19,200 loan to roughly $12000 correct? ($600x12=$7200) and have some positive equity to trade in the car to get a larger Accord. Does that add up? Hopefully Ina years time, my credit would be higher as well.

[Dj4Money]

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@Kathy4NU wrote:

YOu might want to check out DCU.  There rates are below 2% right now.  Just another option.  They did a single pull on Experian for me.  The total transaction took about 4 hours.  Check was over nighted and I had it the next day by noon.

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 When did DCU start pulling Experian? I was offer not approved yet that I know of 5.49% for 60 months. That would shorten the term by eight payments but I am looking for a larger drop.

 Looks as though DCU might give me 3.99% for the same amount of time.