Cash out auto refinance?

[ReBuild-OH17]

In 2010 I bought a used 2007 equinox, my credit was horrible so my interest rate was 24% with Chase. Fast foward to 2012 I applied for refinance with a local credit union, come to find out my car is worth almost $2000 more than I owe on it, my new interest rate is 5.29%.  Are banks/credit unions willing to pay the difference to the owners? I've emailed the loan officer I worked with but since its the weekend, I wont hear back until Monday.

thanks

[rena347]

The local credit union did it for my mother on a new loan not a refinance. I had a 2008 Pontiac Torrent (almost same as the equinox) which I wanted to get rid of as I needed a smaller vehicle. When I was looking for a vehicle, the KBB book value was around $18,000 but the car dealers didn't want to give me near that much on a trade-in. They only wanted to give me $14,000 to 16,000 when I owed $12,000. I thought heck on them, I'm not going to give it away to them. My mom said she wanted to buy it (retired on fixed income) so I sold it to her for the $12,000 loan payoff amount. She borrowed from her credit union the total value they would loan for the car which I think was around $15,000 and used the extra money to pay off all of her other bills/credit cards so she only had one payment with a low interest rate.

[Anonymous]

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@tasharn wrote:

In 2010 I bought a used 2007 equinox, my credit was horrible so my interest rate was 24% with Chase. Fast foward to 2012 I applied for refinance with a local credit union, come to find out my car is worth almost $2000 more than I owe on it, my new interest rate is 5.29%.  Are banks/credit unions willing to pay the difference to the owners? I've emailed the loan officer I worked with but since its the weekend, I wont hear back until Monday.

thanks

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Sorry, not sure if I understand what you are asking by paying the difference?  Are you saying you want to take out a loan from your CU for more than you owe on the old loan?  Why would you want to do that?  You have $2,000 equity on the car and can get even more quickly with your new lower interest rate.  Why would you want to kill the equity you have and be nearly upside down?

If I misunderstood, I'm sorry.  If so, perhaps you can clarify what you meant.

[andre181]

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@tasharn wrote:

In 2010 I bought a used 2007 equinox, my credit was horrible so my interest rate was 24% with Chase. Fast foward to 2012 I applied for refinance with a local credit union, come to find out my car is worth almost $2000 more than I owe on it, my new interest rate is 5.29%.  Are banks/credit unions willing to pay the difference to the owners? I've emailed the loan officer I worked with but since its the weekend, I wont hear back until Monday.

thanks

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Banks do in fact do this. I know for a fact Wells Fargo will do this.

But CU might not be willing to do this.

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Sorry, not sure if I understand what you are asking by paying the difference?  Are you saying you want to take out a loan from your CU for more than you owe on the old loan?  Why would you want to do that?  You have $2,000 equity on the car and can get even more quickly with your new lower interest rate.  Why would you want to kill the equity you have and be nearly upside down?

If I misunderstood, I'm sorry.  If so, perhaps you can clarify what you meant.

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 That is exactly what the OP wants to do. He wants to take the equity out of his car to get some cash.

Its an okay option of the car needs repairs or something. Personally, I wouldn't do this either, but sometimes you just need some cash ASAP. But think of it this way, its WAY better than taking a cash advance on a credit card or payday loans.

And since the OP's car is a 2007, the car is now depreciating at a slower rate than a newer car so being upside down isn't a big factor as long as the OP is making his payments and paying a little more than the minimum.

[my25reasons]

Yes. Definitely. I refinanced my vehicle about 2 years ago to come up with $1000 for something else. My CU rep was the one who actually suggested it, instead of taking out a loan.