topic Re: Credit Score for Refi in Auto Loans

Credit Score for Refi

Nick777 — Sat, 20 Mar 2021 22:21:49 GMT

My mother in law has a car loan with Chase around 5.49% for 7 years on a Subaru Forester... I think a 2018, but the loan just started in January after her 3 year lease came up. I told her that she could refi at a better rate, possibly as low as 2.49% with a local credit union that she already has a mortgage with. Her credit is bad... I don't know how bad, but its bad. My question is - if Chase gave her a car loan, wouldn't another bank probably refi that car loan, especially a credit union?

Re: Credit Score for Refi

CH-7-Mission-Accomplished — Sun, 21 Mar 2021 16:16:29 GMT

@Nick777 wrote:
My mother in law has a car loan with Chase around 5.49% for 7 years on a Subaru Forester... I think a 2018, but the loan just started in January after her 3 year lease came up. I told her that she could refi at a better rate, possibly as low as 2.49% with a local credit union that she already has a mortgage with. Her credit is bad... I don't know how bad, but its bad. My question is - if Chase gave her a car loan, wouldn't another bank probably refi that car loan, especially a credit union?

Sorry to say but 5.49% interest rate for a "bad" FICO score is a great rate. You need to pull her credit and find out what her FICO 8's and FICO 9's are. Most people with bad credit are paying 8% to 24% interest rates and once their scores get better they can refinance down.

Chase is very conservative so I would bet her scores were at least okay when Chase financed her.

Re: Credit Score for Refi

Nick777 — Sun, 21 Mar 2021 03:50:43 GMT

OK, but I'm looking for an opinion on my question.

Re: Credit Score for Refi

coldfusion — Sun, 21 Mar 2021 10:28:24 GMT

@Nick777 wrote:
OK, but I'm looking for an opinion on my question.

He pretty much dd, it was a gentle approach. I'll be more blunt.

If, as you claim she has "bad" credit, which infers she has < 580 FICO 8 scores, I think she'll find it difficult to refinance a recent 84 month loan on a 3 year old car with a substantively better rate than what she got from Chase in the first place. However, you won't know if you don't try.

Re: Credit Score for Refi

4sallypat — Sun, 21 Mar 2021 16:07:19 GMT

Try Capital One Auto Navigator with her info.

With a SP, they can tell you about how much she would qualify for a used car in a similar make/model/miiles...

This is exactly what I am going to do when my Honda lease is up later this year - Cap 1 SP will give me an idea of what re-fi a used car will give me...

Then I can decide if I want to go with the captive lender's re-fi or Cap 1 or my CU.

Re: Credit Score for Refi

CreditCrusader — Mon, 22 Mar 2021 12:37:20 GMT

@Nick777 wrote:
My mother in law has a car loan with Chase around 5.49% for 7 years on a Subaru Forester... I think a 2018, but the loan just started in January after her 3 year lease came up. I told her that she could refi at a better rate, possibly as low as 2.49% with a local credit union that she already has a mortgage with. Her credit is bad... I don't know how bad, but its bad. My question is - if Chase gave her a car loan, wouldn't another bank probably refi that car loan, especially a credit union?

Based on the information you provided, we're talking a three year old vehicle...probably with 30,000+ miles...and a credit profile that is bad (which, as the other poster said, is usually sub-580).

Even with a mortgage on the books with them, you'll have difficulty getting ANYONE to finance lower than 5.49% on a used vehicle with scores that low. My advice would be to wait until the credit profile improves to refi this loan.

Re: Credit Score for Refi

Anonymous — Tue, 30 Mar 2021 18:15:06 GMT

Sorry you will have an extremely hard time finding a better rate with bad credit. Pretty much guaranteed a no. People need scores in the high 700s to get best rate.