04-01-2013 02:22 PM
Three years ago my fiance had zero credit, none at all. She needed a vehicle quickly and went to a dealership that really screwed her. Long story short she agreed to finance a 2006 Mazda Tribute at 24 percent interest and payments of 434 a month! She has made her payments on time now and with my help, has established her credit, its still new but at last check her score sat right at 700. This loan will be paid off Jan 2014. A friend has advised that we refinance the car. My first call was to capital one, who sends us prequalifed offers for new vehicles all the time. They told us that since the vehicle just hit 100k miles it was disqualified. We have called nationwide bank as well BlueHarbor and got quotes from each of them...but especially blueharbor didnt recieve the best reviews from the sites I visited. Do you guys have advice what direction I should be headed in or is this something we will just have to eat for almost two more years. I am patient and trying to get the best advice I can, I have just never dealt with this kind of trash auto financing in my life.
04-01-2013 03:20 PM
04-01-2013 05:01 PM
You could actually be in a good position if you are willing to sell the car, depending on how much interest/principle is coming out of each payment at this point. If you are still paying a significant amount of interest with each payment, then you have a few options:
1. Throw every extra dollar you have at each payment and pay off the loan early.
2. If the payoff amount of the loan is close to the used retail of the car, you could either sell the car on the open market and pay off the loan, then buy a newer car at a better rate with lower payments, or you could take the car into a dealer and trade it in. The high interest rate loan will be paid off in the transaction and will be replaced by a new much lower interest rate loan now that your fiance has a decent score and (probably more importantly) a perfect car payment history.
Option 2 actually seems kind of awesome, because you will get a newer car with lower payments (but you'll increase how much you have to borrow). If you want to keep the car, option 1 seems like the best choice.
04-03-2013 08:09 PM
Thank you SO MUCH for the DCU suggestion. We looked into it, called them, and two days later our loan is refinanced for 4 percent, little better than the 24 she was paying lol. Saving almost 280 per month until its finished......its crazy, thanks alot
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.