Auto Loans

[dloza]

So in December I got financed by Capital One for an auto loan on a ridiculous rate of 16.5%. I pretty much had to take it because we just had a child and needed a bigger car. Now I'm getting ready to close on a mortgage on May 8th, which I'm thinking helps my credit score improve even more than what it already has since I originally got the car loan. My question is does anybody know what would be a good amount of time to wait before trying to refinance the loan and get a better rate? also, with who? I hear people haven't really had good luck refinancing a Capital One loan with Capital One, which makes sense. Why would they want to give you a lower rate when they are making more money on the higher one.  

[pizzadude]

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dloza wrote:

So in December I got financed by Capital One for an auto loan on a ridiculous rate of 16.5%. I pretty much had to take it because we just had a child and needed a bigger car. Now I'm getting ready to close on a mortgage on May 8th, which I'm thinking helps my credit score improve even more than what it already has since I originally got the car loan. My question is does anybody know what would be a good amount of time to wait before trying to refinance the loan and get a better rate? also, with who? I hear people haven't really had good luck refinancing a Capital One loan with Capital One, which makes sense. Why would they want to give you a lower rate when they are making more money on the higher one.  

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Obviously I would wait until you have closed on your new house.   It's hard to say what adding a mortgage to your reports will do to your FICO score, but it might lower your AAoA since it will be a new account.

Do you have any banking or CU relationships that you could leverage for doing a refi ?    I don't know if Cap1 would refi their own loan, I kinda doubt it, but you could always give them a call and ask.

[dloza]

Well my plan was to wait about 6 months after my mortgage and then see what my options are. At that point my loan will be close to a year old. I don't have a CU but many people have been telling me that's the way to go.

[webhopper]

A CU is definately the way to go... I was able to refi a 7.5% TFCU loan into a 4% NFCU loan...

Before I got the 7.5% offer from TFCU on Monday, the other offer on the table was 13.5% from Ford Motor Credit at the dealership on a Saturday...  I said No thanks

on the Ford loan, and set out to get financing on my own. The dealership actually hooked me up with TFCU.

Also if you have a banking relationship, that may help... I was able to refi a 18.9% loan into a 5.5% loan due to my banking relationship with Chase... Granted the car was worth 18k and I only owed 7k.... The paydown of principle probably helped a lot in the Chase refi.

[brandoncraig]

I was in a very similar same situation. I essentially had to take a really high interest rate for my car loan (20% - yikes!) because I needed the car and my credit wasn't poor - but rather I had a short history and high utilization rate.

Fast forward 1 year, I've made all of my payments on time since then, got a few CLI's and my utilization is much lower. I used BlueHarbor auto and allowed them to find the lowest rate for me. They found me a credit union with a 5.19% rate. I gladly accepted and that is the loan I have now. I would recommend using a company like BlueHarbor, or like others said, checking out a credit union.

[sweetseptember79]

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dloza wrote:

So in December I got financed by Capital One for an auto loan on a ridiculous rate of 16.5%. I pretty much had to take it because we just had a child and needed a bigger car. Now I'm getting ready to close on a mortgage on May 8th, which I'm thinking helps my credit score improve even more than what it already has since I originally got the car loan. My question is does anybody know what would be a good amount of time to wait before trying to refinance the loan and get a better rate? also, with who? I hear people haven't really had good luck refinancing a Capital One loan with Capital One, which makes sense. Why would they want to give you a lower rate when they are making more money on the higher one.  

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I just refinanced a Capital One auto loan with PenFed credit union. My original interest rate was 12.5%. PenFed is advertising refinance on used cars for 1.99%. My original terms was 60 mos, which I have 29 mos left on the loan. With refinancing with PenFed, I am able to pay it off in 24 mos with the same payment. Refinancing does pay off. I will save $1700 in interest and pay off my loan 5 mos earlier. Definitely wait until your score recovers from your mortgage loan. Let things settle and make sure that your score is above 700. You can join PenFed credit union even if you aren't in the armed forces. They ask that you just make a donation to a armed forces charity, which they list the link to on their site. Good luck!!

[BigDaddy18]

Credit Union is the way to go, I would take the advice of others and try to get one!  Wait the six months at a minimum and see where your scores are, then go come back here and let us know so we can help you make a decition that won't hurt you.  Just advice though hope this helps!!

[carloan]

I would say you wait until your mortgage loan has already taken care of. Because I don't think that closing your mortgage can your credit score higher, which in turn won't give you a lower interest rates on your plans for taking a new auto loan.