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Auto loan refinance after 12 months?

Hutchman92
Valued Member

Auto loan refinance after 12 months?

Hello, I received an auto loan for a 2020 Honda Accord last June. I've since paid off around 4500 principal reducing total owed to around 22k from 26.500. My interest rate is 10% as my credit was likely 620s when pulled with some baddies and  no auto loan previously. I joined a local Florida credit union, Achieva, about 8 months ago and was told to pay 12 months before looking to refinance. Also they said if I refinance this year it would still be classified as a "new" car as it only has 13k miles and my LTV should be less than 90%. I got a great deal on the total price but interst is killing me. I also recently joined navy fed but have only been there a week and haven't deposited funds into accounts yet but they did  approve me for a 1000 credit card. In the last week my score went up from 640 to around 680 TU and EQ and experian shows an auto 8 score of 675. I've technically only made 11 payments but I always pay an extra 200 or so half way through month. So really made over 20 payments but only 11 monthly. I suppose I could pay June early and that would be the 12th payment and around a year since inception. Should I apply for refinance now? I could potentially have some more baddies come on report as I've received some debt letters  but I could also have some fall off. Still have a few older baddies that will fall off in 2022/2023. What should I do? I could apply for refinance now or try and resolve the old charge offs and possible increase to 700+ but not positive and on the flip side I could actually go down as I've recently increased by over 30 points. I would love to refinance my 73 month loan ($494/mo) to 36 months and pay off sooner for 650-700$ a month if I could get less than 5% interst but I don't know if I meet those thresholds or if I should hold off until better score and risk  1. More baddies coming up and 2. The car not being considered new any longer?

8 REPLIES 8
Morehouse3000
Frequent Contributor

Re: Auto loan refinance after 12 months?


@Hutchman92 wrote:

Hello, I received an auto loan for a 2020 Honda Accord last June. I've since paid off around 4500 principal reducing total owed to around 22k from 26.500. My interest rate is 10% as my credit was likely 620s when pulled with some baddies and  no auto loan previously. I joined a local Florida credit union, Achieva, about 8 months ago and was told to pay 12 months before looking to refinance. Also they said if I refinance this year it would still be classified as a "new" car as it only has 13k miles and my LTV should be less than 90%. I got a great deal on the total price but interst is killing me. I also recently joined navy fed but have only been there a week and haven't deposited funds into accounts yet but they did  approve me for a 1000 credit card. In the last week my score went up from 640 to around 680 TU and EQ and experian shows an auto 8 score of 675. I've technically only made 11 payments but I always pay an extra 200 or so half way through month. So really made over 20 payments but only 11 monthly. I suppose I could pay June early and that would be the 12th payment and around a year since inception. Should I apply for refinance now? I could potentially have some more baddies come on report as I've received some debt letters  but I could also have some fall off. Still have a few older baddies that will fall off in 2022/2023. What should I do? I could apply for refinance now or try and resolve the old charge offs and possible increase to 700+ but not positive and on the flip side I could actually go down as I've recently increased by over 30 points. I would love to refinance my 73 month loan ($494/mo) to 36 months and pay off sooner for 650-700$ a month if I could get less than 5% interst but I don't know if I meet those thresholds or if I should hold off until better score and risk  1. More baddies coming up and 2. The car not being considered new any longer?


I had a BK 13 on my report when I got a car from Carmax.  Cap 1 gave me an interest rate of about 12%.......I had bad credit.   Joined Navy and waited about 2 weeks when I refinanced with them for that car and got it down to like 8%.  My scores were lower than yours probably low 600's.   Had my loan with them for over a year then found out about DCU and refinanced with them and got my rate down to 2.74% still with the BK13 showing (it was about 6 years old by then) and greatly reduced my payments.  DCU rates are far better than Navy and I love Navy but DCU saved me a ton of money.

Message 2 of 9
Hutchman92
Valued Member

Re: Auto loan refinance after 12 months?

How long ago was the DCU refinance? I'm not a member but have 2 credit unions that I belong to. Is membership required?

Message 3 of 9
aj2121
Contributor

Re: Auto loan refinance after 12 months?

Capital One Auto Navigator allows for soft pull refinance prequalification. It will give you various terms and rates to choose from. While that may not be your best rate, it should give you an idea of what you qualify for. If their rates come back around 10% or with no approval, then you know it should be in your best interest to wait a little longer. If the rates are close to what you are hoping to be at, then you should look at your Local CU and any federal CUs, if those rates aren't better you can always accept the Capital One rate. As long as all of the apps are within 2 weeks of the first one, you should only have the one inquiry impacting your score.

FICO8 as of 4/9/21:
Message 4 of 9
Hutchman92
Valued Member

Re: Auto loan refinance after 12 months?

The original loan is through cap one and I was told they don't refinance their own loans but a good idea for an idea of approval. 

Message 5 of 9
aj2121
Contributor

Re: Auto loan refinance after 12 months?

I believe you are correct about them not refinancing their own loans. I am not sure if they will give you a refinance preapproval then since the original loan is through them.

FICO8 as of 4/9/21:
Message 6 of 9
Dj4Money
Established Contributor

Re: Auto loan refinance after 12 months?

 Capital One will not refi their own car loans.

 

 There companies I haven't heard of that will refinance cars.

 

 I too bought a car after Chapter 7 and it will be a year in June. I was told something similar here that If I refi soon the car will be classified as new and better rates typically for new car loans than used, even if it's a refi.

 

 That is my experience when I had refinanced my previous Hyundai/Kia product. The value of the car is fairly close to the amount owed. Most refi will go up to 120% or more of the value.

 

 Look on Credit Karma for pre-qualified deals, Experian and Nerd Wallet. You can also try Lending Club and similar sites like that.

 

 

Message 7 of 9
dunn2500
Frequent Contributor

Re: Auto loan refinance after 12 months?

i refinanced a new truck after 4 months or.......7500 miles was cutoff between new and used thru these credit unions, i was under so it was still considered new

Message 8 of 9
Dj4Money
Established Contributor

Re: Auto loan refinance after 12 months?

 My Accent had nearly 30K on it when I re-financed , considered new by them (Logix). Shrug, shop around.

Message 9 of 9
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