topic Re: When should I refi? in Auto Loans

When should I refi?

Anonymous — Thu, 19 Jan 2017 01:31:10 GMT

Was forced to buy a car about 6 months ago. Right at the beginning of my rebuild. 2012 Acura TL in great condition for a little over 21k. Put a few thousand down but my credit was/is so terrible that my APR is 20%. Payment is $500 a month. Definitely want to refi with DCU or Penfed but not exactly sure when to do it. My scores have slowly crept up to about 615. Started working with a family friend who is doing a great job of cleaning up my late payments and small collections. Also just got approved for a couple of credit cards so my score should increase significantly in the next 6 months. Really looking forward to getting that payment down to about $350 but not sure how long I should wait to refi. Thanks for any advice!

Re: When should I refi?

Anonymous — Mon, 23 Jan 2017 04:37:17 GMT

Hoping some veterans will see this post again and give me some wisdom!

Re: When should I refi?

George2037 — Mon, 23 Jan 2017 17:34:48 GMT

I was in the same boat when I bought my last car, about 8 months post BK and a 18% car loan with one of those "your paycheck is your credit" places. I refinanced at about 6 months in with my Credit Union and it went down to about 5%. It's really dependant on the CU you want to go with and the loan to value ratio, it never hurts more than an Inquiry to find out. Check the Blue Book value and see how far your off, if you put money down you may owe less than it's worth which makes it easier.

Re: When should I refi?

Anonymous — Mon, 23 Jan 2017 18:10:15 GMT

Spoke with DCU via chat. They do the APRs in tiers based on Equifax score. They told me that once I am at 640 I will be eligible for a 3.99% without doing any other banking with them. That is perfect for me considering I am at 20% right now. So I will be waiting a few months until I am over 640 then will go ahead and refi through them. Man I will be saving tons of money.

Re: When should I refi?

Anonymous — Tue, 24 Jan 2017 07:45:34 GMT

Assuming the downpayment you put down put you in a 'decent' equity position to fight off the double whammy of
A) a horribly high rate &
B) the daily depreciation
Of the vehicle

Obviously, the sooner the better for the refi
Pay attention to the value of the car AND how
OLD of a car the lender will do a loan at what rate.

Again, you're looking at a 5 y.o. model as of right now, make sure that rate counts for your car's age.

Generally, speaking there is a scoring break with a 12 months no hiccups auto loan...If growing credit is the only concern.

But when dealing with death rates on cars I say get out ASAP...Too much jeopardy in being in a bad car loan IMO

I'm with you @Bluff but many times just because a person say THOUSANDS down doesn't necessarily mean much because of taxes etc + the high rate and how well the car was bought in the 1st place...Really matters
Many times bad credit ppl just take the price as is so it winds up a triple issue
Top dollar
Relative small DP
High %

I'm not familiar with how well the value of the Acura holds up are if the OP got a good to great deal originally on the car.
The better the original deal, the better position you're in now.

Good luck

Re: When should I refi?

Anonymous — Tue, 24 Jan 2017 12:32:40 GMT

Acura is made by Honda. They are incredible cars. Just think of my car as a nicer version of the Accord. I put 190k miles on my last TL. This one only has 60k miles on it. With proper care I should be able to drive this car for another ten years if I want to. Pay it off in 5 years and drive it for another 5. Plan is to refi when scores get to 640.

Re: When should I refi?

Anonymous — Tue, 24 Jan 2017 17:12:24 GMT

As far as the wait, shouldn't have to wait long at all. I had originally gotten financing with Capital One when I bought a car in March of last year. 9.5% APR. Had looked at DCU at the same time, but they wouldn't approve. One month later I reapplied with DCU and got 3.49%. They dropped 0.5% for having direct deposit with them and then dropped another 0.25% after 3 months on time payments and again at 6 months. They are awesome to work with and am saving me tons

Re: When should I refi?

MrsCHX — Wed, 25 Jan 2017 21:28:02 GMT

@Anonymous wrote:
As far as the wait, shouldn't have to wait long at all. I had originally gotten financing with Capital One when I bought a car in March of last year. 9.5% APR. Had looked at DCU at the same time, but they wouldn't approve. One month later I reapplied with DCU and got 3.49%. They dropped 0.5% for having direct deposit with them and then dropped another 0.25% after 3 months on time payments and again at 6 months. They are awesome to work with and am saving me tons

They did a refi with you with your EQ below 640? What was it when you applied?

I have been a DCU member for almost a year and have an 18.65% loan with GM Financial. I have to try to get it refinanced.

Re: When should I refi?

Anonymous — Wed, 25 Jan 2017 21:49:08 GMT

@MrsCHX wrote:
@Anonymous wrote:
As far as the wait, shouldn't have to wait long at all. I had originally gotten financing with Capital One when I bought a car in March of last year. 9.5% APR. Had looked at DCU at the same time, but they wouldn't approve. One month later I reapplied with DCU and got 3.49%. They dropped 0.5% for having direct deposit with them and then dropped another 0.25% after 3 months on time payments and again at 6 months. They are awesome to work with and am saving me tons
They did a refi with you with your EQ below 640? What was it when you applied?

I have been a DCU member for almost a year and have an 18.65% loan with GM Financial. I have to try to get it refinanced.

That is hilarious because I have my loan through GM Financial as well at 19%. DCU will do a refi on you even if you are below 640. I just used 640 because that is the tier they gave me when I was doing an online chat with them. I would suggest going on their website and doing an online chat with a rep to ask them the different tier levels based on your scores. I'm not even a member and they were willing to give me that info.

Re: When should I refi?

Anonymous — Wed, 25 Jan 2017 22:01:13 GMT

I believe my Eq score from DCU was 631 on the first they gave me. They do use an older model, but that is what they went off of I believe

Re: When should I refi?

Anonymous — Wed, 25 Jan 2017 22:28:59 GMT

I have been in a similar situation so I will just speak on my approach. Your APR is really high as you know and car loans are front loaded with interest so almost all of your current payment is going to interest so refinancing asap is the best approach in my opinion. I started with a 12.5% loan then 6 months later went to 8.5% and a week later 4.29%. Car loans have no closing costs so there as long as you have an acceptable loan to value ratio there isn't a downside to refinancing to take advantage to improving terms. The catch is that you don't want to continue to extend the term each time you refinance because regardles of how good a Acura is it like any car is a depreciating asset so you don't want to get caught out on the loan to value ratio. I would refinance asap and take a shorter term, your payment will be lower than what your paying now. Before you apply I would take a close look at the value of your car to ensure you have a good loan to value ratio, I suspect you are a bit upside down so that might be an issue.

Re: When should I refi?

MrsCHX — Mon, 30 Jan 2017 21:51:21 GMT

Thanks! I'm up to a EQ 628 per DCU and will be going up more by end of February. I'm thinking I'll definitely be over 640 and hope to apply in March for the refinance.