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New Visitor
raybel
Posts: 3
Registered: ‎06-20-2013
0

I need Help!

Hello everyone I am have been trying to refinance my current vehicle but there is no financial institution who wants to help me with my account.

Let me explain from the begining:

I bought a vehicle from carmax financed in carmax

I decided to change to a truck and so I traded my vehicle in carmax

they offered me the truck with 12.15% and monthly payments of $560 a month, that was my mistake signing the contract under this conditions.

when I started making payments I had realized that was too much money for a 2007 truck even tough it was low in mileage.

When I started trying to find a place to refinance my vehicle every institution was saying the same thing. the vehicle you are trying to refinance is not valued at the amount of money you owe.

I had negative equity from the last vehicle which was added on top of the value of the truck. and I have a good credit score.

I have tried.
CHASE

CAPITAL ONE

FEDERAL BORDER CREDIT UNION

SPACE COAST CREDIT UNION.

I dont know where else to go and I dont wanna be making payments forever.

Moderator
pizzadude
Posts: 9,669
Registered: ‎01-28-2010
0

Re: I need Help!

What is the approximate difference between what you owe and the book value that lenders can offer? Could you secure a smaller loan, like a personal loan, to cover the deficiency?
March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
New Visitor
raybel
Posts: 3
Registered: ‎06-20-2013
0

Re: I need Help!

I owe $27000 and the value is about $16000
Established Contributor
SamsungHDTV
Posts: 542
Registered: ‎10-25-2011
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Re: I need Help!


raybel wrote:
I owe $27000 and the value is about $16000

At those figures your Loan to Value (LTV) is almost 170%. Most lenders have a threshold of anywhere from 100-115% LTV before it becomes automatically declined.

It's not that they don't want to help you, they would love to refinance you but its too risky.

 

The only way is to pay the difference in negative equity and bring it down closer to 100% LTV.

I'm a personal banker and do a lot of auto loans serving the Houston area.
I suggest first time car buyers to read the sticky guide in the auto loan section.
I try to check these forums often, but if I missed your post, please feel free to message me with a link to it.
Established Member
sdotlow
Posts: 82
Registered: ‎05-06-2013
0

Re: I need Help!

That's a really bad situation.

 

Is there any way for you to make additional payments on the principal?  Is this a simple interest loan?

 

Unfortunately you're stuck dealing with the payments.  If you can't cover making additional payments on the principal, it might be worth it to consider a second job or finding side work to compliment your income to get out of the hole you're in.

 

There's no easy answer, and no easy way to get out of this.


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New Visitor
raybel
Posts: 3
Registered: ‎06-20-2013
0

Re: I need Help!

I'm gonna call and find out if the first year can they put more percentage on the principal just so I can try to reduce the negative equity.

Established Contributor
SamsungHDTV
Posts: 542
Registered: ‎10-25-2011
0

Re: I need Help!


sdotlow wrote:

That's a really bad situation.

 

Is there any way for you to make additional payments on the principal?  Is this a simple interest loan?

 

Unfortunately you're stuck dealing with the payments.  If you can't cover making additional payments on the principal, it might be worth it to consider a second job or finding side work to compliment your income to get out of the hole you're in.

 

There's no easy answer, and no easy way to get out of this.


I agree here. If possible, find a second job and put all the extra income to principle. And keep the mentality that you're making whatever salary the job is paying + the interest that you're saving on the life of the loan.

 

Also, go looking around the house for items that you or your family doesn't need and sell it. Hopefully you can find enough to sell that will make a dent in that principle.

I'm a personal banker and do a lot of auto loans serving the Houston area.
I suggest first time car buyers to read the sticky guide in the auto loan section.
I try to check these forums often, but if I missed your post, please feel free to message me with a link to it.
Community Leader
Senior Contributor
StartingOver10
Posts: 4,076
Registered: ‎03-06-2010
0

Re: I need Help!


raybel wrote:

I'm gonna call and find out if the first year can they put more percentage on the principal just so I can try to reduce the negative equity.


Really, not to burst your bubble, but they aren't going to do that. You are in a super high risk loan and you have the high risk interest rate on your loan. The reason you have such high negative equity is because of the interest rate as well as the amount of negative equity transferred from the last vehicle. If they "put more percenntage on the principal" that is the same as reducing your interest rate. That is not going to happen.

The posts above are right - get a second job and pay principal payments along with your regular payment. Also look around your house and sell everything you have that you don't need to gather up funds to apply to your loan. Once you get the balance to market value, you can refi into a reasonable loan.


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