Should I Refinance Now or Wait?

[SouthJamaica]

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@Anonymous wrote:

Hi everyone.  Newbie here with my first post.  I'm kinda lost here, so would love to hear your thoughts.

I'm working on improving my credit.  I'd like to refinance the current loan I have with GM financial.  I bought a 2013 Chevy Equinox in February of this year.  My payment is $359/month for 72 months at 11.35%.

My initial thought was to wait a year and try refinancing then.  The thought was that my credit would be better at that point.

This week, I applied for & was approved for some credit cards, thinking they would help my scores increase over time.  I got the GM buypower ($300), citi double cash ($1000) & DCU ($1000).  

I started looking into DCU after reading about them on the boards.  I spoke with someone in the loan department who told me with my score of 630 (EQ fico 5), if I was approved, I'd get 5.99%.  They would also use the hard pull from earlier this week.

Any thoughts on if I should apply for this now or wait a bit for my 3 new cards to start reporting.  Credit wise, I've always had to take whatever loan was offered & I feel unsure about what to do, now that I'm starting to have options.  Would appreciate everyones opinions.  Thanks!

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Yes I think it's a perfect time for you to refinance at 5.99%

And don't apply for any credit cards or other things for awhile.

[Appleman]

Congrats, glad the information helped and good luck in getting the process completed quickly.

[Anonymous]

Hi everyone,

I decided to call DCU yesterday to follow up on my loan application. Finally got to talk to someone and was told the loan was funded and that i was approved. As stated previously, I will go from 11.35% to 5.49%. Payments from $360/month to $320/month.

This brings up a new question for me. I guess I'll have a lot for the forum going forward, since I'm trying to do whatever I can to improve my credit as much & as quickly (i know, this is an excrutiatingly slow process, lol) as possible. Based on my current credit card debt, what would be the best use of the $40 each month.

Scenario A: Put it towards paying down one of my credit cards.

Scenario B: Pay it towards the auto loan principle. I believe DCU has this option, will investigate further.

My focus right now is to still pay down my credit cards, ensuring that each statement is reporting a lower balance than the last. I'm putting the Capital One cards away & will only be using my Citi Double Cash card for items I can pay off immediately. That way I'll be earning money as well. I will charge something small or put a small recurring payment on the other cards each month. For my Loft card, i usually buy 1 or 2 things, then pay the minimum of $27 each month. I'm also planning to garden for a while to let my accounts age a bit. My balances are as follows and are listed in order of acquisition. I added the interest rate because I wasnt sure if that mattered.

Capital One Secured - 571/800 - 23.15%
Capital One QuicksilverOne - 1108/2000 - 23.15%
Loft 53/750 - 25.24% (recently received a 500 cli)
GM Buy Power Card 0/300 - 0% until 7/17, then 23.15%
Citi Double Cash 0/1000 - 0% until 4/17, then 23.24%
DCU Visa - 0/1000 - 18.0%

Lastly, I did inquire about increasing my credit limit on the DCU credit card, but was told that since it was already issued, I would have to wait a year. No biggie, I'm just happy to have the card & an opportunity to show my credit worthiness as I improve. Just sharing in case anyone was interested.

:-)

[EddieK]

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@Anonymous wrote:
This brings up a new question for me. I guess I'll have a lot for the forum going forward, since I'm trying to do whatever I can to improve my credit as much & as quickly (i know, this is an excrutiatingly slow process, lol) as possible. Based on my current credit card debt, what would be the best use of the $40 each month.

Scenario A: Put it towards paying down one of my credit cards.

Scenario B: Pay it towards the auto loan principle. I believe DCU has this option, will investigate further.

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Put it towards your CC debt.  You're paying 5.49% interest on the car, CCs are way higher than that.

[jrands]

Concur, put the extra $40 on revolving debt. If I understand things correctly, high revolving debt is seen as more of a negative than installment debt.