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In December I desperately needed a new vehicle but but scores were not great so the interest rate on my loan with Capital One Auto Finance is in excess of 10%. My scores have since substantially improved and I'm looking to refinance my auto loan in the next few months once I pay one or two more charge-offs.
As of June 2nd my auto FICO 8 Auto scores are: Experian 658, TransUnion 653, Equifax 642
My vehicle is a 2017 Toyota RAV4.
What loan-to-value % should I shoot for to get my interest rate under 5%?
Hello! From my experience, you would need to raise your scores a little bit to get your rate under 5%. It's not so much that the rate will go down with your loan paid %. You could prequalify with something like lendingclub, but what you really want to do is get your scores up above 670 to see the better rates for refi on a used auto. DCU offers their best rates with an EQ5 at 730. I was offered 4.74% when I was at 671. I think they will finance up to 120% of NADA retail on the vehicle. Credit unions will tend to offer better rates on auto refinance.
Wow! Thanks @Mv350 for the heads up on DCU -- they have amazing rates! It looks like existing members get a .5% discount too so I will be sure to open a checking account with them.
I'm hoping that when I pay off my $1.4k charge-off with Chase this month my scores will increase to the 670 needed. Do you know if DCU uses the FICO 8 Auto scores for their auto loans?
Thanks!
@beutiful5678 ,They don't use auto enhanced scores. They will use your EQ mortgage 5 score for all of their lending.
@beutiful5678 wrote:That's good news too! My EQ5 is 666 (<-- gasp!) as of June 1st. I imagine paying my Chase charge-off should win me at least 4 points.
That would definitely help. Mortgage scores are particularly sensitive to how many cards are carrying balances. Any cards having heavy utilization, would show great improvment if you could bring them down a little bit. If you joined soon, you might be able to see if you are prequalified on their July 1st round of soft pulls for their current members.