Not sure on what to do with our Capital One Car loan. Please help us.

[jreyes0101]

The loan is through Capital One Auto Finance. We still owe $12,000 and the interest rate is currently at 14.4% We have always paid on time and our currently monthly payment is $340 a month. I wish we never did sign up for this car loan. But our only car at the moment practically had mechanical problems and it would cost $3,000 to fix or more to fix. We couldn't borrow a car from anyone either. My wife and I got our bankrputcy finalized in February 2010. It was mostly due to high dollar medical bills. 

My wife and I both tried to refinance our car loan with our credit union. But we are currently upside down on the car loan. It was a while ago but I think the loan processor said we need $3,000 or more to be able to refinance with them. The vehicle is a 2008 Mazda Tribute I model. It's got the 2.3 liter 4-cylinder engine. It has 110,000 miles on it. 

Obviously we both have poor credit. But we are working on it right now. We just paid $200 on my wife's Capital One credit card. I have a paypal credit card of $300 and my wife has a Paypal as well at $500. My Paypal is currently paid off and soon hers will be too. We owe $300 on hers. 

The ideal situation is to refinace with a lower interest rate and a reduced monthly payment. But we are not sure that will happen with our poor credit rating. 

We are not sure what to do at this point. Oh by the way, if the finance manager at the dealership tells you that you can refinance a year from now and get a reduced interest rate and a lower monthly payment don't believe him!!! But now we learned our lesson. Sadly too late. 

I am interested in going with Roadloans to refinance. But not sure. What is your opinion on them? 

I  hope we can get out of this mess we're in. 

Thank you for reading.

[CAnNY]

Are you saying you want to refi a car with over 100k miles? In reading a lot of these post I was under the impression that was not possible, however for you if it's your only option I certainly hope I'm wrong. Also, if you are upside down then you will have to come out of pocket with difference before anyone will refi more than likely.

Typically you can refi but that is with the impression your credit has improved overall and you have a good pay history, but the current lender is not going to do the refi. You have to find a new lender to do the refi with. 

I have no experience with road loans.

Good luck!

[sccredit]

You have a couple of strikes against you for a refi:

1. You are upside down

2. You have over 100k miles

3.  What are your credit scores??

Check out DCU.org and see what they say, or Logix as that might be an option as well.  

[coterotie]

How much extra can you pay each month?  Bad news is you probably overpaid and financed for too long.  More bad news is that the car on trade-in is likely worth $7k.  But unless you are putting all those miles on the car, you have a chance to outrun the negative equity as there will soon be a floor in what the car will decline to.   What you should do is go to a loan amortization site on the internet.  This will show you how much of your payment each month is going to principal.  Then set a goal of getting the neg equity down within the next 12 months.  Likely something on the order of $200 extra each month will get you pretty close to even on the loan. 

If you can get your scores up and the balance down, you might be able to qualify for a prime card at the end of the year and transfer any remaining negative equity to a 0% balance transfer card and get the loan refied or get rid of the car.  Avoid at all costs the temptation to roll over any negative equity into a new vehicle.

Wish I could give better news but just can't see it.

[jreyes0101]

Thank you all for the feedback. 

I'm going to contact my local credit union and I will give them my  VIN and find out what is my vehicle worth right now. 

We just paid off three credit cards so that will free up money to put extra down on the car loan. Sadly like everyone else said I will have to pay extra and put all I can on the car loan. Hopefully when taxes come around I will get get a refund and put all the rest on the car loan and hopefully be able to refinance.