@kingkai1990 wrote:
Hi! I have a $20k loan (down to $17k) from capital one on a CPO Car from a year ago. The warranty is still good on the card, but the 8% is pretty bad (actually it was 10% but Cap 1 brought it down to 8%). The question is....my credit score will soon be 120 points higher than when I got the loan. 720 vs 600 initially. Will I be able to refinance? I heard that loans on used cars are harder to refinance. Would I save a considerable amount or should i just pay higher amounts each month?
You should always refinance a high interest car loan if you can get it done. I suggest joining Penfed, NFCU or DCU all three are great with car loans and applying, over the life of the loan it will save you thousands so its well worth doing. The key is loan to value however, many folks are unable to refinance because they have too much negative equity to get it done so you want to know your payoff amount and the value of the car, if the payoff and value are close you should be able to get qualified and cut that interest in half or perhaps a little better than half. I refinanced a 12.57% loan to 8.5% with CapOne and then literally a week later joined NFCU and refinanced it down to 4.29%. On a 25k loan over 72 months it saves me about $7,500 in interest so well worth the effort. The only other caution is to not extend the term of the loan so if you have 60 payments left with your current loan its best to do a 60 month loan rather than a 72 for example. Let us know how it goes. There are many success stories here and many thousands of dollars saved in interest charges as a result.
