Auto Loan Refinancing

[EaglesFan2006]

I am interested in refinancing an auto loan.  I had pretty mediocre credit when I got the car loan in 2009.  Monthly payments for the car (07 Camry) are around $400.  Naturally, the bulk of that has gone to interest.  Now that my credit has improved, I am wondering what steps I can take to refinance a loan.  Is it possible to do so through another bank?  Am I better off waiting another 6 months?  What are the steps required to look in to this?

[ibmrad7]

I was in your position last year.. Bought a honda... APR was 14.99%, got it refinance from a CU at 4.99% after 4 months. One thing to note is, they would only refinance on your cars current worth...

For example: if you bought it for 15000, paid 2000 until now and in their evaluation system price came out 11000, they will only finance on that 11000. You have to put down the remaining 2000. Up side down.

[EaglesFan2006]

Thanks for the tips.  Is there any way to read more about this?  Since most of my payments have covered interest so far, what does the mean for the refinance value?

[ibmrad7]

Not sure if CU's and banks go with KBB, NADA or they have their own evaluation system. Maybe someone else can throw some light on this?

[Anonymous]

We talked to our favorite banker (USBank) and they were pretty straightforward about where they got their numbers and how much they would finance before asking us to app.

We wound up going with our favorite CU (a local).  They were also very straightforward with where they got their numbers and were willing to finance several thousand more on a used car. 

Check out which CU in your area (or state) does the most auto financing (they usually include it in their advertising or on their website - you won't have to hunt for it) and be sure to touch base with them, along with whoever else is on your short list.  But don't feel like you have to app in the dark - sit down and visit with the staff, they're usually pretty forthcoming.  And, just in case, carry along a current FICO report and ask which report they pull.  Make sure they understand not to pull your credit until you're ready to app.

Good luck - I wish you the best!

[taz3261]

Agree go with the credit union mine refinanced everything even the upside down value.

[Anonymous]

If you can join Navy Fed, I know they don't care if it is upside down or not. Had 5 or 6 car loans with them through the years and it was always based on the amount I ask for and not what I was buying.

[Anonymous]

NFCU has lending standards just like everyone else in regards to LTV and vehicle make, model, age and mileage.  They may be somewhat more lenient.

[Anonymous]

Navy Fed obviously has lending standards! Everyone has some kind of standards. All I'm saying, is a 4 years ago I applied for a 44K blank check new car loan and used it to roll 4K of negative equity from my old car plus all the tax, title and tag fees. They obviously didn't follow follow the 110% standard there. It was closer to 125% in that case. As it pertains to this discussion, I re-fied my truck with them a few months ago and owed 2K more than it was worth and it was no problem again. And that loan was slightly over 30K. Just my examples from buying cars every 18 months or so and mostly using NFCU for them. (I know I should be leasing in some folks mind.)