i can't refinance my 29% interest rate on my car loan because of bankrupty

[ezdriver]

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@StartingOver10 wrote:

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@ezdriver wrote:

IMHO, it is extremely difficult to refi an auto loan after a bankruptcy and do so at much improved rates. I have given up on doing that and instead I'm focused on paying ff the loan as quickly as I can ... in 2 yrs vs 4 yrs as a matter of fact. I'm already into the 2nd year. Short of shopping for a NEW auto and buying it with/without trading in the current auto, I don't know if any other way of getting out from under the high interest rates that we pay after a bankruptcy. My financed auto is a 2007 E350 Sport ... a very nice car that I plan to keep for a very long time. If it were much less of a car, I'd trade that puppy in for a NEW car for sure.

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^^^Thats why I bought a fairly cheap SUV (slightly better than a beater but not much) after my discharge and only financed $3500 for about 8 months. Had to put down $3k to buy it too because I had just had my discharge for one day.  Had it for 2 years and sold it for $3500 IIRC. Then bought a 2 yr old used Toyota Venza at 7.14% two years out from my discharge. I had an additional issue because I am self employed (1099 commission income) and the only thing worse than a BK is a person that is self employed recovering from a BK! Of course, it's a little easier now as the economy has loosened up quite a bit since my discharge in Jan 2009.

So if you are W-2 type employee and have a discharge you get really good rates. If you buy something before discharge that rate is huge and IMO not worth the risk.

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I was between a rock and boulder! I had two cars with no loans on them. I was told by an attorney friend that I should trade one in and get a newer car with a loan on it in order to protect it in bankruptcy. I paid a small fee to keep the other [2002 Mercedes E430 Sport] which I love. I can pay it off in a few months but buying a house is a higher priority for now. Live and learn ... but I have driven beaters for several years as I worked to recover from my own self-employment meltdown ... owner of two mortgage brokerages. By the way, I was a W-2 when I bought and financed the car and I did not get really good rates as your post suggests that I should have.

[StartingOver10]

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@ezdriver wrote:

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@StartingOver10 wrote:

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@ezdriver wrote:

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So if you are W-2 type employee and have a discharge you get really good rates. If you buy something before discharge that rate is huge and IMO not worth the risk.

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I was between a rock and boulder! I had two cars with no loans on them. I was told by an attorney friend that I should trade one in and get a newer car with a loan on it in order to protect it in bankruptcy. I paid a small fee to keep the other [2002 Mercedes E430 Sport] which I love. I can pay it off in a few months but buying a house is a higher priority for now. Live and learn ... but I have driven beaters for several years as I worked to recover from my own self-employment meltdown ... owner of two mortgage brokerages. By the way, I was a W-2 when I bought and financed the car and I did not get really good rates as your post suggests that I should have.

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I'm surprised you didn't get a good rate because you seem to do your homework. I was sure my rate was higher (7.14%) because I was self employed and had the 2 yr old BK and only put about 20% down on the new purchase. My score at the time was in the low 700's.  I have also come to the conclusion that the lenders will use your field of employment against you for certain industries and you and I are in those industries (real estate and mortgages).

I see posts here where recently discharged BK'ers are getting low single digit rates! Of course that's for new cars and I won't pay the price for a new vehicle. It's not worth it for me because I put on way too many miles. I would rather pay $10k+ less for the vehicle and a slightly higher interest rate. I can pay the loan off early with no penalty. But it's a huge penalty if you buy new and pay that extra $10k+ in the purchase price IMO.

[ezdriver]

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@StartingOver10 wrote:

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@ezdriver wrote:

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@StartingOver10 wrote:

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@ezdriver wrote:

....

So if you are W-2 type employee and have a discharge you get really good rates. If you buy something before discharge that rate is huge and IMO not worth the risk.

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I was between a rock and boulder! I had two cars with no loans on them. I was told by an attorney friend that I should trade one in and get a newer car with a loan on it in order to protect it in bankruptcy. I paid a small fee to keep the other [2002 Mercedes E430 Sport] which I love. I can pay it off in a few months but buying a house is a higher priority for now. Live and learn ... but I have driven beaters for several years as I worked to recover from my own self-employment meltdown ... owner of two mortgage brokerages. By the way, I was a W-2 when I bought and financed the car and I did not get really good rates as your post suggests that I should have.

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I'm surprised you didn't get a good rate because you seem to do your homework. I was sure my rate was higher (7.14%) because I was self employed and had the 2 yr old BK and only put about 20% down on the new purchase. My score at the time was in the low 700's.  I have also come to the conclusion that the lenders will use your field of employment against you for certain industries and you and I are in those industries (real estate and mortgages).

I see posts here where recently discharged BK'ers are getting low single digit rates! Of course that's for new cars and I won't pay the price for a new vehicle. It's not worth it for me because I put on way too many miles. I would rather pay $10k+ less for the vehicle and a slightly higher interest rate. I can pay the loan off early with no penalty. But it's a huge penalty if you buy new and pay that extra $10k+ in the purchase price IMO.

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Hopefully others will learn something from this dialog.

I moved very quickly and made the decision that either way, it would cost me a few thousand bucks [pay it to the trustee and keep an older car or pay it to the finance company and have a beautiful newer car] as I worked my way through the ch 7 bankruptcy process. For me, it is always about the number. In any case, I will pay if off shortly after I'm in my new home in five months. Like you did, I have paid cash for my previous four cars.

[Scupra]

Very thankful for NFCU giving me 4% on a used car. I waited one year post file date.

[jackielicious]

i tried capital one but i got turned down even though i have a secured credit card with them for almost a year now..

[jackielicious]

my current lender is tidewater. the car is around 14k and after a year and 6 months it went down to 11k. and my interest is 29%.

[jackielicious]

yes i'm 100% sure. when i bought my car they told me that i should refinance after a year because of the interest rate.. the reason why i have a high interest rate is because of my bankruptcy.. it sucks.. maybe i should just trade my car in and put a huge down payment so that i can get a lower interest...

[anca21bi]

I was in the same boat until a couple weeks ago. I have a 24.99% interest rate with Santander for just barely a year in November. I hit the 6 month mark and tried with 3 different places even Capital One to refi my car loan. I talked with multiple credit unions so I wouldn't get a useless Hp. So I was on creditkarma and saw a refi offer with carfinance.com, decided to give it a try since I am now over a year with the loan and was approved. My interest rate now is still at a high 15.99 but a lot better than before. Also my monthly payment is $100 less a month. I will probably trade in the car at the end if next year. I had a Bk in 2009 an mid to high 500s credit score, with a repo in 2012.