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Horrible Experience with Santander Consumer USA

Regular Contributor

Horrible Experience with Santander Consumer USA

I have horrible credit. Santander Consumer was the only company that would grant me an auto loan. I am stuck with an apr of 22%. I don't know how to get out of this madness! I am basically paying more money then the car is worth. I'm trying to buildmy credit so i can possibly refinance next year and hopefully prevent another situatuion like this when i decide to purchase a home. Has anyone ever dealt with this company?




Starting Score: 491 Across the board (1/24/18)
Current Score: TU 623 EQ 639 EX 659 (2-23-18)
Goal: 669 then 700 club across the board
Inquiries: TU 17/EQ 22 /EX 23
Gardening 2/23/18 to Dec 2019?



quot;>



Current Scores: 2\25\2018 TU 684 EQ 638 EX 659

3\11\18 TU 669 EQ 640 EX 636
Message 1 of 30
29 REPLIES
Senior Contributor

Re: Horrible Experience with Santander Consumer USA

Work a second job, cut spending, make extra loan payments until you have equity, sell the car or refinance.

Not much else to do, unfortunately.
Message 2 of 30
Regular Contributor

Re: Horrible Experience with Santander Consumer USA

I plan in making a lump sum payment with my income tax to pay up for at least a year, maybe even pay half if the amount due for pay off. Just don't want it to be eaten up in interest. So far not much has gone to principal. If I pay half off what's left and make regular scheduled payments after that lump sum will I still be building credit? And how do I make sure it goes towards the principle? Not sure if I'm asking the right questions sorry I'm new to the forum.



Starting Score: 491 Across the board (1/24/18)
Current Score: TU 623 EQ 639 EX 659 (2-23-18)
Goal: 669 then 700 club across the board
Inquiries: TU 17/EQ 22 /EX 23
Gardening 2/23/18 to Dec 2019?



quot;>



Current Scores: 2\25\2018 TU 684 EQ 638 EX 659

3\11\18 TU 669 EQ 640 EX 636
Message 3 of 30
Regular Contributor

Re: Horrible Experience with Santander Consumer USA

Also I've only had the car for 11 months. All my payments have basically towards interest. I was given the idea that because the car payoff play be more than the car is worth I may have trouble refinancing. Any truth to that?



Starting Score: 491 Across the board (1/24/18)
Current Score: TU 623 EQ 639 EX 659 (2-23-18)
Goal: 669 then 700 club across the board
Inquiries: TU 17/EQ 22 /EX 23
Gardening 2/23/18 to Dec 2019?



quot;>



Current Scores: 2\25\2018 TU 684 EQ 638 EX 659

3\11\18 TU 669 EQ 640 EX 636
Message 4 of 30
Senior Contributor

Re: Horrible Experience with Santander Consumer USA


Newbie2018 wrote:
Also I've only had the car for 11 months. All my payments have basically towards interest. I was given the idea that because the car payoff play be more than the car is worth I may have trouble refinancing. Any truth to that?

It depends on the bank!  Calculate what the car's value is today.  If it's more than 120% of the loan amount, you can't get refinanced.  Some banks only refinance 80% loan-to-value (LTV), others do 120%.

 

I always tell people to monitor their car's value every month and to send extra payments if needed to keep their loan balance below the car value so they're never underwater.

 

Bad credit auto loans suck, but if you need a car, it's one of the few solutions.  Next time around try to find a reliable beater versus a more expensive shiny car, but for now just throw more money at it.  Some loans accrue interest daily, so you can actually send $50 a week extra and the interest calculates "slower"/"less".  So instead of sending $200/month extra, send $50/week there.

Message 5 of 30
Regular Contributor

Re: Horrible Experience with Santander Consumer USA

Thank you for the advice.
I will have to get my credit up before I even think about refinancing because my credit union has already stated, with the score I have now, if I come in next year hoping to refinance I won't be approved. So I have a ways to go. My car on Kelly blue book says that it's worth $9,775 my loan amount is $8,698. Not to good with mad but I think I'd have a chance with refinancing. I will find the other forum about how to rebuild credit effectively and also check out your homework. I'm ready to start this journey.



Starting Score: 491 Across the board (1/24/18)
Current Score: TU 623 EQ 639 EX 659 (2-23-18)
Goal: 669 then 700 club across the board
Inquiries: TU 17/EQ 22 /EX 23
Gardening 2/23/18 to Dec 2019?



quot;>



Current Scores: 2\25\2018 TU 684 EQ 638 EX 659

3\11\18 TU 669 EQ 640 EX 636
Message 6 of 30
Senior Contributor

Re: Horrible Experience with Santander Consumer USA

You can definitely get refinanced but if you can get the LTV to 80%  ($7820) you have an even better chance.

 

Remember your credit scores are greatly affected by credit card utilization, so if you carry balances, practice the AZEO method (see my 11 rules signature link) to get your scores up to help with refinance preapproval.

 

The #1 thing I can suggest to you is to set a goal and make it a priority.  If your goal is to refinance your auto loan, then before you spend even $1 on coffee, ask yourself "Is this going to make my goal easier or more difficult?"  Work towards your goal, and reduce spending towards your goal.  Once you get to your goal, set a new one to compare your income/expenses against.

 

My personal goal right now is to buy a bigger boat (to live in in 3-5 years).  So I find myself passing on some "luxury" items at the grocery store just because $3 saved on not buying the fancy deli meat is $3 more towards my goal.

Message 7 of 30
Regular Contributor

Re: Horrible Experience with Santander Consumer USA

The "LTV" means loan total value correct? So how do i do that? Tell them i want to pay towards my principal? Sorry for all the questions i want to fully understand. You have been super helpful by the way. Yes, i have a secured card through bank of america and my utilization is pretty high. Will pay it down for sure. Would it help my score if i increased my limit and put a bigger payment so that instead of $300 limit i have maybe a $600 limit? One last question, where can i find my true Fisco score and how can you tell that a company is reporting your payments to a credit agency? Credit karma only shows me that i am in good standing and current and shows me which months have been paid on time. The date of last payment is never correct though and i can never tell if they have reported anything. I'm positive by now i should be seeing some sort of point increase. I did notice that they use Vonage instead of the FISCO i hear everyone talking about. I'll definately read up on AZEO right now and see how it can help. 




Starting Score: 491 Across the board (1/24/18)
Current Score: TU 623 EQ 639 EX 659 (2-23-18)
Goal: 669 then 700 club across the board
Inquiries: TU 17/EQ 22 /EX 23
Gardening 2/23/18 to Dec 2019?



quot;>



Current Scores: 2\25\2018 TU 684 EQ 638 EX 659

3\11\18 TU 669 EQ 640 EX 636
Message 8 of 30
Frequent Contributor

Re: Horrible Experience with Santander Consumer USA

LTV stands for loan to value, so if you are financing 12,000 on a vehicle with a NADA clean trade value of 10,000 you are at 120% LTV.

 

Try pulling your NADA values and pay attention to NADA Clean trade in and NADA clean retail, most CU's will use retail values and loan up to 110% usually and sometimes higher if credit is excellent. Some lender's, usually banks and captive lender's such as Ally, Wells Fargo, etc use NADA clean trade in value and will often finance as much as 135% LTV or higher if credit is excellent but I would never recommend financing such a high LTV.

 

As far as Santander Consumer USA goes, you have to understand it is not their fault, they are simply capitalizing and essentially taking on a HUGE RISK financing someone with bad credit. A subprime lender that specializes in subprime financing experiences huge loss's and ton of defaults, late payments, and charge-off's. Unfortunately with bad credit and you are wanting to finance a vehicle that may be your only option and they are often willing to give you a chance. It's up to you to clean your credit up in order to get out of the subprime market and not have to finance with lender's like that anymore. They give a ton of people who don't deserve the chance to get an auto loan, a chance and they often pay for it with charge-off's which is why they much charge so much interest to remain profitable.

 

You can't blame a lender for charging a high interest rate, you can only blame yourself for getting into that situation, I don't mean to be rude or negative, just simply stating that this company serves their purpose and ultimately you signed the contract with that bank who gave you a chance.

AMEX BCE ($39,500) CITI AAdvantage ($18,500) Region's Platinum Card ($14,400) Discover IT ($18,000) Macy's ($7,000) Chase FU ($10,000) TU:788 EX: 767
Message 9 of 30
Senior Contributor

Re: Horrible Experience with Santander Consumer USA


Newbie2018 wrote:

The "LTV" means loan total value correct? So how do i do that? Tell them i want to pay towards my principal? Sorry for all the questions i want to fully understand. You have been super helpful by the way. Yes, i have a secured card through bank of america and my utilization is pretty high. Will pay it down for sure. Would it help my score if i increased my limit and put a bigger payment so that instead of $300 limit i have maybe a $600 limit? One last question, where can i find my true Fisco score and how can you tell that a company is reporting your payments to a credit agency? Credit karma only shows me that i am in good standing and current and shows me which months have been paid on time. The date of last payment is never correct though and i can never tell if they have reported anything. I'm positive by now i should be seeing some sort of point increase. I did notice that they use Vonage instead of the FISCO i hear everyone talking about. I'll definately read up on AZEO right now and see how it can help. 


I'm here to help those who want to learn to help themselves, but credit score stuff is so confusing that it takes a few tries before you "get it".  So don't stress right now, just take some notes and keep reading!  I'll try to answer your questions above as best as I can...

 

LTV = Loan-to-value.  What this means is how much the loan amount is versus the value of the item.  If you have a $10,000 loan on a car that is worth only $8000, your LTV is 125% which is bad.  Auto lenders "prefer" to see LTV 80% or lower, but many of them will give you 100% or even 120%.  The higher the LTV, the higher the interest rate might be.  So getting your LTV to 80% can help lower your refinance rate.

 

To pay down principal -- depends on the bank, unfortunately.  Some loans (rare though) don't let you prepay without a penalty.  I would call your lender and ask.  Then hang up and call again and ask someone else.  If they aren't in agreement, call, hang up and ask a third person or a manager.  Your original loan documents will have a section on prepayment options!  Some lenders require you to tell them if you are paying principal down or "prepaying a future payment".

 

Credit Card Utilization -- FICO looks at two different calculations.  The first is "individual utilization" meaning on any one card you have.  If you have a $600 limit and report a $300 balance, your utilization is 50%. ($300/$600 = 50%).  The second is "aggregate utilization" which means the total of ALL your credit card balances divided by the total of ALL your limits.  If you have only one card these two utilizations will be the same. If you have multiple cards, you need to do some math.  FICO likes to see aggregate utilization LESS than 8.9% (but not $0).  So if you have a $600 limit, you want your statement to show a balance of 8.9% or lower -- $53 would do it.  Note that if you have interest posting at statement date, it will raise your balance so you need to do more math.  Please note that you can USE your card for up to the full limit, but you have to PAY DOWN your card before the statement date so that is what will post to your reports.  If you screw up one month, don't worry, you can fix it next month.  FICO doesn't "remember" past balances in its score!  Asking for a credit limit increase is a great idea but only if it's a "soft inquiry" and not a "hard inquiry".  Do some research here or ask others since I don't have a BoA credit card.  A soft inquiry doesn't hurt your score while a hard inquiry can ding you for a few points for 6-12 months.  It isn't major, but why risk it?

 

FICO Score -- there are many versions of FICO but we tend to look at FICO Score 8.  There are 3 bureaus (Experian, TransUnion, Equifax) each with a possibly different score based on slightly different reports.  You can get a free monthly FICO score at www.creditscorecard.com and check it monthly.  No credit card needed there, it's truly free!  Some banks also provide a FICO score.  If it just says "credit score" it may not be a useful score, it HAS to say "FICO" score somewhere.

 

I would suggest you get yourself to a total of 3 credit cards, if you only have one.  The first 3 cards don't "hurt" your FICO score, they help it.  So if you have 1 card, look for 2 more cards to help your score before refinancing.  Discover is a great card and they have a prequalification page which is usually accurate.  Capital One also has great cards and an accurate prequalification page.  If you only have 1 credit card, snag 2 more (or try prequalification pages and report back what offers they show you and we can help you pick).  3 credit cards (even if you only use 1) boosts your FICO score nicely.

Message 10 of 30