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How soon should I ask to refinance my car loan?

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Valued Member

How soon should I ask to refinance my car loan?

Ok i financed an auto loan this past august at an extremely high percentage rate with a credit score of 588,  my score just jumped to 623, is it too soon to refinance?  Is there a certain time frame i need to wait in order to refinance?  Thanks

Starting Score: 588
Current Score: 640
Goal Score: 750


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Message 1 of 9
8 REPLIES 8
Regular Contributor

Re: How soon should I ask to refinance my car loan?

I'm also interested to see the responses to this question!
Message 2 of 9
Moderator Emeritus

Re: How soon should I ask to refinance my car loan?

http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

 

What is your current rate? What CR changed? And how sure are you that a lender would use the same report and score? Did the dealer in August provide you with a score?

 

I don't know the answer to whether or not you can refinance. I don't see why not. You may want to look at your agreement to be sure to make sure.

 

Ignore "mortgages" in the link above; you can use these amortization tables for a car loan too. I don't know your rate, but even decreasing from 19% to 12% can save you about $100/mo, despite only paying about $700 in principal over the prev. 3 months, based on an example of $23k borrowed at 5 yrs.

 

A 623 FICO score, assuming this came from myFICO, isn't all that high. Better than 588, though. Congrats. I bet with a month's worth of effort with repair, you can bring your FICO scores into the high 600s and have that in place by January and potentially qualify yourself for a single-digit rate.

Message 3 of 9
Valued Member

Re: How soon should I ask to refinance my car loan?

Thanks for the great advice!  You dont even want to know how high my interest rate is right not...its like 24%!!   Id like to think I did a smart thing though and I  bought a car for only 5k....its a nice car with high miles,  it is helping me rebuild my credit and its actually in mint condition.  An 02 Grand Am,  the loan is only 24 mnths, my payments are 264. but ive paid 300 every month on it.  Im not trapped paying for some 20k car,  which im really glad about.  The way I see it by the time this car is paid off my credit score should be significantly higher so I can turn around and get a newer car with a great interest rate.   I think ill take your advice and wait a few months and go from there.

Starting Score: 588
Current Score: 640
Goal Score: 750


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Message 4 of 9
Senior Contributor

Re: How soon should I ask to refinance my car loan?

Do you belong to a CU?  Have you spoken to one?  That is the nice part of CU's is you can talk to a live person, explain circumstances and goals.  CU's are there to help members improve their finances through better loan rates and better rates of return....if you are qualified. 

 

Also, score alone doesn't dictate approval and rate....the actual contents, your income and debt are important considerations as well.  The higher the "risk" the higher the rate.

 

 

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09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549
Message 5 of 9
Valued Member

Re: How soon should I ask to refinance my car loan?

Well its been 6 months since i financed my car at 24%, with a payment of 247.00 a month,  the other day I walked into my local credit union and joined by opening an account with $20. and told them i was looking to refinance my car.  Within 1/2 hour they cut me a check!!  My credit score was at 588 it is now 640!  Interest rate went down to 13% and is now saving me $105.00 a month,,wooooohooooooo.  I just finished paying off a $1200.00 collection,  my credit cards are now all either payed off or below $100.  I rented an apartment for May 1st and with my now okay credit score i didnt need to put down last months rent, only the regular deposit.  All i can say is that it feels awesome and i can only go up from here.  This site really gave me so much info that has helped me tremendously in getting my score up so id like to thank the forum.  I have recommended this site to all my friends and family,  thanks again!!!!

Starting Score: 588
Current Score: 640
Goal Score: 750


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Message 6 of 9
Moderator Emeritus

Re: How soon should I ask to refinance my car loan?

Congrats, Tracy!
Message 7 of 9
Regular Contributor

Re: How soon should I ask to refinance my car loan?

Awesome news Tracy!!!! Keep up the great work.
TU: 752, EQ: 761, EX: 745
Message 8 of 9
Valued Member

Re: How soon should I ask to refinance my car loan?

Thanks everyone,,and not that it matters but..my payments were 264. not 247.  oops.

Starting Score: 588
Current Score: 640
Goal Score: 750


Take the FICO Fitness Challenge
Message 9 of 9