topic Re: Accelerate Auto Payment Plan in Auto Loans

Accelerate Auto Payment Plan

twinkle — Thu, 21 Nov 2013 19:57:02 GMT

This forum has helped me a bunch! Thank you for your time!

I want to accelerate payment on my car loan to pif within 1 year.

Would the following example work? How would it effect my credit?

Car balance $25,000 ($10,000 upside down...I know)

16% APR

48/72 months remaining

0 late payments

KBB worth approx $20,000 private party

Paycheck $4000 total monthly

Bills/Spending $3000 monthly

Car payment $700 monthly

Credit card $10,000/$0 balance

LOC $15,000/$0 balance

Month 1:

Put my entire check towards car payment

Put all monthly bills/spending on credit card

Use LOC to pay credit card bill and car payment

Month 2:

Put my entire check towards LOC

Put all monthly bills/spending on credit card

Use LOC to pay credit card bill and car payment

Month 3:

Repeat month 1

wash, rinse, repeat until paid in full.

Re: Accelerate Auto Payment Plan

Creditaddict — Fri, 22 Nov 2013 00:58:07 GMT

@twinkle wrote:
This forum has helped me a bunch! Thank you for your time!
I want to accelerate payment on my car loan to pif within 1 year.
Would the following example work? How would it effect my credit?

Car balance $25,000 ($10,000 upside down...I know)
16% APR
48/72 months remaining
0 late payments
KBB worth approx $20,000 private party

Paycheck $4000 total monthly
Bills/Spending $3000 monthly
Car payment $700 monthly
Credit card $10,000/$0 balance
LOC $15,000/$0 balance

Month 1:
Put my entire check towards car payment
Put all monthly bills/spending on credit card
Use LOC to pay credit card bill and car payment

Month 2:
Put my entire check towards LOC
Put all monthly bills/spending on credit card
Use LOC to pay credit card bill and car payment

Month 3:
Repeat month 1

wash, rinse, repeat until paid in full.

Who is the LOC with? Navy?

Why don't you apply to refi the car??

Re: Accelerate Auto Payment Plan

twinkle — Fri, 22 Nov 2013 02:41:27 GMT

Yes, all are with NFCU.

I called a year ago to ask about refinancing and the rep told me that they could not do it. I don't recall the exact reason.

Should I look to refinance with another CU instead of accelerating payments?

Re: Accelerate Auto Payment Plan

Creditaddict — Fri, 22 Nov 2013 02:50:33 GMT

A year ago... Apply online right now!!!!
I would apply for 48 month loan.

Re: Accelerate Auto Payment Plan

twinkle — Fri, 22 Nov 2013 02:57:58 GMT

Ok. I will post an update. Thanks!

Re: Accelerate Auto Payment Plan

twinkle — Fri, 22 Nov 2013 03:28:28 GMT

Update: According to the website..... your vehicle must be financed with another lender to qualify for refinance.

I think that's what the rep stated also.

Re: Accelerate Auto Payment Plan

Creditaddict — Fri, 22 Nov 2013 04:15:08 GMT

@twinkle wrote:
Update: According to the website..... your vehicle must be financed with another lender to qualify for refinance.
I think that's what the rep stated also.

oh im sorry, you currently have it financed at 16% through Navy? WOW

I thought you meant you tried to refi a year ago and your credit wasn't good enough.

yes i would look for other credit unions to try to refi.

I would not use your Loc to float bills just because the rate is probably just as high as your car and they calculate that daily so you will spend more money on anythin you borrow from the loc then just paying as you go... and don't think using credit cards with navy just to pay more towards car makes sense either... because if it did you could just cash advance it into your checking account and pay your car but not sure having a $10k maxed credit card and a $15k auto loan is going to do you any good either, because now you have more monthly payments.... just pay as you are and throw every extra penny towards additional payments on that car and start looking for another credit union to refi it.

Re: Accelerate Auto Payment Plan

KoolDev — Sun, 24 Nov 2013 14:14:10 GMT

Creditaddict is right.

Be VERY careful that you do NOT get into the trap of borrowing from a loan to pay a loan. Using your LOC is what that is. It will bite you thru payments and total outgoing. I have been where you are at. If anything happens unexpectedly, you will be in a position you cannot pay on your regular bills. With mine, I bit the bullet and struggled thru becaue i didnt have the credit scores to refi at the time. Also, if you are upside down that much, you will have to find out what the LTV rate is on the car. Some banks limit this and It would be too much to try and refi.

Just dont want to see you get into a positon where those 0 accounts now have a payment due and you sink through having too many payments. Things happen, be careful.

Re: Accelerate Auto Payment Plan

twinkle — Mon, 25 Nov 2013 23:01:26 GMT

I agree!

Update: I applied to refinance with another CU today and was approved ...pending final review.

Term:

60 months

APR 13.75 %

$420 monthly payment

I'm required to pay approx $7200 to bring my balance current. The rep mentioned paying this in full or applying for a loan to cover it. Should I keep what I currently have?

What are your thoughts?

Re: Accelerate Auto Payment Plan

Creditaddict — Mon, 25 Nov 2013 23:46:23 GMT

@twinkle wrote:
I agree!

Update: I applied to refinance with another CU today and was approved ...pending final review.

Term:

60 months
APR 13.75 %
$420 monthly payment

I'm required to pay approx $7200 to bring my balance current. The rep mentioned paying this in full or applying for a loan to cover it. Should I keep what I currently have?

What are your thoughts?

Bring Current??

What is the amount you owe Navy

What is the amount of this new loan?

Why would you not get the new loan for just 36 or 48 months?

Re: Accelerate Auto Payment Plan

sccredit — Tue, 26 Nov 2013 00:20:25 GMT

@Creditaddict wrote:
@twinkle wrote:
I agree!

Update: I applied to refinance with another CU today and was approved ...pending final review.

Term:

60 months
APR 13.75 %
$420 monthly payment

I'm required to pay approx $7200 to bring my balance current. The rep mentioned paying this in full or applying for a loan to cover it. Should I keep what I currently have?

What are your thoughts?
Bring Current??
What is the amount you owe Navy
What is the amount of this new loan?
Why would you not get the new loan for just 36 or 48 months?

OP's stated in the first post that the car is upside down. Car note is not late, just upside down

Re: Accelerate Auto Payment Plan

twinkle — Tue, 26 Nov 2013 01:42:59 GMT

Correct. Payments are current. I'm approx $7200 upside down.

I applied over the phone and wasn't offered any other terms. I will inquire about shorter terms when I here back from CU.

Re: Accelerate Auto Payment Plan

Creditaddict — Tue, 26 Nov 2013 02:17:17 GMT

So they are only willing to lend 100% value?
What are they saying value is?

Re: Accelerate Auto Payment Plan

twinkle — Tue, 26 Nov 2013 02:24:22 GMT

valued at $18000

Re: Accelerate Auto Payment Plan

Creditaddict — Tue, 26 Nov 2013 02:41:36 GMT

What is your current payment again?
What would be your option for the$7200 shortage?
Apply for capitalone refi and see what they will approve you for.

Re: Accelerate Auto Payment Plan

twinkle — Tue, 26 Nov 2013 02:50:54 GMT

Current payment $700 monthly.

I would need to finance the $7200.

Ok. I will apply for Capital One refinance and update.

Thanks

Re: Accelerate Auto Payment Plan

Anonymous — Tue, 26 Nov 2013 13:09:18 GMT

One thing that I just wanted to mention after reading all of this is that you should make sure you have some sort of gap coverage if you are that upside down. That will be a huge help with the debt should something happen to the vehicle while you are trying to get out from under the debt.

Also what I have done in the past is to double up payments every other month or try paying every two weeks an extra quarter of a payment. This way you can pay when you have it and if you don't you are okay. Currently I am about 5K upside down myself and I am going to work out a plan to pay at least half of this down so that when I trade out the vehicle for my lease that it will break even. For me it is just paying off a loan my wife got when she had bad credit and it was all we could get. Good luck with your refi, just make sure that it actually makes sense and you aren't just getting a better rate but end up paying the same amount.

Jimmy

Re: Accelerate Auto Payment Plan

Creditaddict — Tue, 26 Nov 2013 16:06:56 GMT

at 13.75% and going back to 60 months and you having to put $7200 on another loan or credit card it is actually going to cost you much much more than just keeping your current loan if you can afford the $700 payment... if you are able to eek out an extra $100-$200 here or there and apply that to principle you are going to start seeing that loan come down faster.

but interested to see if someone else like capitalone would take more than 100%... Navy would take 125% if you were financing with them... surprised DCU won't take more.

Re: Accelerate Auto Payment Plan

twinkle — Mon, 02 Dec 2013 19:46:17 GMT

Update: I applied for Capital One refinance online and was denied.

I decided not to finance/pay $7200 with another CU.

I will continue paying my car payments bau, adding extra payments...when possible.

Thank you ALL!

Re: Accelerate Auto Payment Plan

Pupeitmeister — Thu, 12 Dec 2013 04:30:55 GMT

@twinkle wrote:
Update: I applied for Capital One refinance online and was denied.
I decided not to finance/pay $7200 with another CU.
I will continue paying my car payments bau, adding extra payments...when possible.

Thank you ALL!

That is the best option IMHO!.. Kudos to you for seeing the value of advise on these boards!... I recommend an ammortization calculator. Put i your total due, your interest rate, and the number of months left on the loan. Every time you write a check for the payment, Look at the "interest payment column" for the next month. If you can pay that amount .. highlight that month as paid.. for example : IF you paid March principle of 280.00 with the February check, you just made a "double payment" for only $980. in essence, and saved the 420 in interest. This works for all "simple interest loans" btw. Mark that month paid... You would be surprised how fast it will drop if you look at it like that, In this example, every time you do so, you save that interest, so once a quarter drops you by 4 payments, or 2800 dollars a year on the debt. and in this example, costs you approx 1100.. so instant savings of 1700.00 Just my 2c .. Good luck with getting out from being upside down!

Month    Payment amount    rate    interest    principal    balance
Jan    700    15%    425    275    24000
Feb                                 700    15%    423 277    23733
march 700    15%    420    280    23453
April      700    15%    419   281    23172

edited to mention: I pulled these numbers out of thin air, and they are not accurate to anyones situation (unless its pure dumb luck). Feel free to PM me if you need assistance in further clarification.