28% auto loan refi

[Anonymous]

Hello, I just took out an auto loan on a 2012 Acura MDX with 80k miles. Finances amount is $16,524.96 @28% from American credit acceptance. I know this is absurd but I desperately needed a 3rd row SUV because we just had baby #4. I did put a large down payment 4400. My FICO scores are in the crapper. All about 500. I have a repo 1.5 years ago, ch7 discharge 4 years ago. I’ve already tried DCU and capital one for refi and got denied. Would I be better off to just wait 6-12 months then try? The retail value of the vehicle is about $19,700 according to KBB, so I don’t think I’m upside down

[Shooting-For-800]

You are going to have a hard time finding a decent APR with a repo after a BK.

28% is bad, real bad, but it is only on your balance.

Do you have any other debt?

How long is your loan for?

Can you make $1000 per month payments?

If so, you can cap your interest at @ $5k total and call it a day.

If not, you need to fix your credit and that just will not happen quickly.

The BK is not what is killing your score.

Many lenders prefer to see BK than a ton of late debt.

[Anonymous]

The loan is for 66 months. Yes I can afford $1,000 a month and that was basically my plan was to try and pay it down as soon as I can. So even if I was able to get the loan paid down to 50% LTV probably not a very good shot at refi?

[MrPSS]

Good job putting the $4K down, but I literally just almost choked on my margarita!!

[Anonymous]

You may not be upside down today but watch out.  if you pay the regular payment only after 1 year you will have only paid down aout $1,500 in interest.  No doubt the car will depreciate faster than that.

Some lenders will refinance up to 120 % of the book value (DCU).

FYI DCU seems like an auto decline for any loan until 2 years post discharge.  Once I hit that I refinanced a car loan at 4.something % and got their Platinum Visa.  Maybe the are like that with the repo so things may look better a little more than 2 years after the repo.  

What does your credit report show for the repo?  Is there a balance owed still?  That could be the kiss of death on a refi if you have a repo with balance owed.

I would pay down as much as you can and try again in 7 months give it some time for that repo to age past 2 years.  I know that's 6 months but give it 1 more for good measure.

Also don't apply for anything until you get this car loan refinanced, nothing at all even if you think you will get approved.

Even paying minimum in 6 months you should still be rightside up on the loan but paying down extra could help.

If you are able to refinance in 6 months at even 7.9% that would be a $200 a month savings

What other negatives are on your report?

Is there anything reporting incorrectly that should show as included in bankruptcy?

How many inquiries do you have?  I know auto inquiries within a time period are grouped as 1 but with low scores lenders maybe more sensative to new accounts and inquiries.

[Anonymous]

Echoing other's here, but you will be VERY hard pressed to find a lender willing to refinance you at a lower rate so soon. A repo after a BK is hard to get around, and most prime banks won't consider you until you've re-established your credit once again, likely taking a few year's worth of payments.

A reposession after a BK is one of the hardest thing's to overcome when financing a vehicle, Take the advice of other's and pay absolutely as much as possible each month on the vehicle in order to minimize finance charges. All while building your credit and repairing it, and keeping an emergency fund. The faster you pay this vehicle off, the more money you save.

[Appleman]

You may not be upside down today but watch out.  if you pay the regular payment only after 1 year you will have only paid down aout $1,500 in interest.  No doubt the car will depreciate faster than that.

I believe you meant only paid down $1500 in principal.

Interest in year one will be $4,447.65 with principal of $1,470.75

Good luck and hope the Acura is trouble free!

[Anonymous]

Yes Principal is what I meant.

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@Appleman wrote:

You may not be upside down today but watch out.  if you pay the regular payment only after 1 year you will have only paid down aout $1,500 in interest.  No doubt the car will depreciate faster than that.

I believe you meant only paid down $1500 in principal.

Interest in year one will be $4,447.65 with principal of $1,470.75

Good luck and hope the Acura is trouble free!

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[Shooting-For-800]

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@Anonymous wrote:
The loan is for 66 months. Yes I can afford $1,000 a month and that was basically my plan was to try and pay it down as soon as I can. So even if I was able to get the loan paid down to 50% LTV probably not a very good shot at refi?

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I would think that if you showed a credit union a history of $1000 payments, they would be willing to take a chance at some point before its paid off.  12-18 payments in a row at $1000 would def raise some eyebrows IMO.  In addition, your credit score should be rising at the same time.  Double positive.

GL!

[Miner]

If you are going to take out a high interest loan, never take a loan with such a long term. It should be something you can pay off in 3 years or less if you can't get it refi'd.  And going into such a loan, you should have a plan to improve your credit scores so you can get refi'd in 6 months to a year.  To have scores in the 500's  says you have unpaid accounts updating.  If you couldn't get a better loan now, you aren't later unles you change something.

On a loan that long, your regular payment is mostly going to interest for the first half of the loan life with very little applied to the principle.  The vehicle's value will depreciate at a much faster rate than you are paying it down which will make it impossible to ever refi it as you will owe more than the vehicle is worth; and the amount you are underwater is only going to get worse for most of the loan period. 

You need to pay enough extra each month towards the principle so that you never owe less than the car is worth so you can always sell it or refi it if your credit situation improves.

If I had been you, I would have bought a used mini-van for $5000 to $7000 with the 3rd row and paid anything owed off in the first year where a high interest rate wouldn't have mattered.  And then I'd work on cleaning up my credit so I can qualify for a better vehicle with a more affordable interest rate.  The rate you got sounds like you got it from a loan shark.