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I'm happy to get the approval but I am curious what happens when I take the loan? Do I make two payments until my old high APR with santander is paid? Or will DCU give me a month or two to pay them off and start the new loan with them? Any chance if I speak with a loan officer that I can get the full 9k and pay off the old loan?
You will have come up for the difference on what you owe - DCU will want the title ASAP once you process the loan.
They have you 45 days to take the offer - and on your 3 notice, to give them the title.
They will send a check for 7k, but you need to give the other 2k.
They MIGHT consider to give you more - but that is based off your income PLUS debt
If you have more income I am 100% sure they will increase the amount.
One of their reps emailed me saying "We will be able to provide 80% of your loan to value of your current vehicle." My vehicle is worth around 8k per blue book, and I owe 9k on it. My boss told me if he needs to write me a bigger check to help show them I make more money he will do that, but I dont think that's necessary. I make around 75k a year between two income sources.
What I have learned about DCU
THey are VERYYYYY stingy
and very strict on their terms.
If you got a better rate take it and find the 3k somewhere.
I don't think income is the issue.
It seems the issue is the actual value of your vehicle - DCU doesn't want to loan you more than 80% of it, meaning the other 20% of your car's value, plus any negative equity you have in it right now, is going to have to be paid in cash, by you, at the time you accept the loan.
If your car is worth $8K, DCU will loan you $6400. Since you owe $9K, that's $2600 that has to come out of your pocket to accept this loan.
You cannot finance that portion, unless you can do so on a signature loan (not using the vehicle as collateral), because DCU will place a lien on the title for the $6400 they lend you. You cannot simply keep the old loan and begin the new one at the same time - as mentioned earlier, DCU will want Santander to release your title immediately, but Santander will not want to do so until they are paid off completely.
If you are not in a position to pay $2600 cash into the deal at this time, then this is not the deal for you.
I don't know how old or how much mileage is on your car, but with $1000 in negative equity (the difference between what you owe and what it is worth), you need someone to be willing to lend you 112.5% LTV. This is commonplace on new and late-model used vehicles, but gets harder to find the older the car is.
How high is the Santander Loan APR?
It could be worth it to utilize a line of credit or credit card to help pay off the Santander loan so you can get the DCU refi.
As an example, if you are paying 19% on the Santander loan and DCU will refinance you are 4%, doing a cash advance against the right card could still be a good deal (thinking USAA , PenFed or NFCU card with a low APR). If however the rate for the balance transfer or cash advance exceeds your current Santander loan APR you should avoid this tactic.
If you were to use this approach, paying the source of the additional money quickly would be the new priority.