topic Re: Will adding borrower with bad credit affect auto-loan rate on refi? in Auto Loans

Will adding borrower with bad credit affect auto-loan rate on refi?

KnowledgeSeekr — Sun, 03 Jul 2022 01:29:41 GMT

I'm in the mid 700's and my partner is in the mid 500's due to some medical issues. Recently purchased a vehicle that I share with my partner and they cover half the payment. I was approved for a refi at a lower rate with PSECU and my partner would like to be added to the loan so it can help them build up their credit. Since their credit is bad would this end up affecting the rate if added as a co-borrower? It's an hour wait on hold every time I call and I will likely have to withdraw the current app and apply again so was hoping for some answers here before doing that.

Re: Will adding borrower with bad credit affect auto-loan rate on refi?

Fico82 — Sun, 03 Jul 2022 15:45:58 GMT

Hopefully someone with better knowledge will chime in .. but from what ive had read the person with the better credit would define the intrest rate . Thats from what ive read on here. Now what happened to a friend of mine when he did similar situation added his gf as co and she had bad credit his intrest rate went up vs him doing app solo. By about 3-4 % . What i would do is have bank run 2 apps one solo and one with your partner get the actual numbers. Goodluck 👍

Re: Will adding borrower with bad credit affect auto-loan rate on refi?

Creditplz — Wed, 06 Jul 2022 17:49:52 GMT

Most times it does affect it in some way...

make sure they list you as the primary and the secondary be your S/O. I had that happen once and they switched it to me being the secondary just to mark up the rate.. but from experience yeah it affects it but not by much!.

Re: Will adding borrower with bad credit affect auto-loan rate on refi?

Credit4Growth — Sat, 09 Jul 2022 23:02:14 GMT

@KnowledgeSeekr wrote:
I'm in the mid 700's and my partner is in the mid 500's due to some medical issues. Recently purchased a vehicle that I share with my partner and they cover half the payment. I was approved for a refi at a lower rate with PSECU and my partner would like to be added to the loan so it can help them build up their credit. Since their credit is bad would this end up affecting the rate if added as a co-borrower? It's an hour wait on hold every time I call and I will likely have to withdraw the current app and apply again so was hoping for some answers here before doing that.

I would call PSECU Monday morning and ask about your conditions in which you may wish to reapply.

Your current approval/inquiry show be active for use over a 30day period. Your partner will be required to apply (submit to an inquiry) as well, if moving forward with both parties being joined for the auto refinace.

About 1 month ago I did call PSECU to discuss the same underlining conditions for (currently non-members) my brother and his partner.

As of today they have not moved forward with joining PSECU nor refinace the automobile so I can not relay any factual results but I believe you will be pleasantly surprised with the response you get from PSECU... (shhh!... they have a nearly unbelievable truth to share with you about their published rates!).

😁 Let us know how this works out for you!

P.s. am I right to assume your approval for a lower rate, from PSECU, is a lower rate than what you currently have with another institution?

Re: Will adding borrower with bad credit affect auto-loan rate on refi?

KnowledgeSeekr — Sun, 10 Jul 2022 00:08:02 GMT

Thanks, yes 1% less than currently paying. It's a min 45 min wait on hold so was trying to get as much info as I could prior to giving them a call. Appreciate it!

Re: Will adding borrower with bad credit affect auto-loan rate on refi?

Credit4Growth — Sun, 10 Jul 2022 00:22:30 GMT

Yes, since the pandemic started, sometimes they do have long hold times.

So, a month ago I called to reconfirm their current practices and what I have been told a few years ago seems to still hold true. Their published rate is the rate members will receive. Given the standard circumstances of less than or equal to 100% financing.

I hope that holds true for you and your partner. 👍