So my middle score is 577, i got a 2019 toyota corolla through santander, the interest is 19%, and im ok with that, i plan to trade in after 12 on time payments with the toyota loyalty program and try to get a lower rate, by then my 2 small credit cards will be paid way down and the 12 on time payments my scores should be much better, is there anything i need to keep a close eye on with santander during this year?
Sorry why on earth would you trade in a car after 12 months? Do you actually need something larger, etc...? Typically that strikes me as a bad decision because you end up with increasing amounts of negative equity + just wind up padding the dealer's pocketbooks. I'd personally try to pay down the loan by sending extra money to the extent possible to Santander, work on your credit, and try to refi in 12 months vs. buying a whole new car.
I do need bigger yes, and my brother got a 2% rate from toyota with that loyalty program and his credit is like mine, so i was thinking this wouild be better in the long run, and i can put 2k in cash somewhere which ever makes most sense.
Unless you are planning on making significant payments greater than your monthly payment, you are going to be very upside down on your car in 12 months which will make it extremely difficult to roll into a new car, let alone at a 2% rate.
For example, a $20K loan @ 19% interest for 72 months has a monthly payment of $467. After 12 payments you'll have paid $5604 on your loan ($467*12=$5604) but the principal remaining would still be over $18K. 10% of the principle will have been paid but the car will surely depreciate well below that.
I've never heard of the program but I have a hard time seeing your profile getting approved at 2% to be very frank (it's just not profitable is my humble opinion).
What I'd do if this were me is try to pay down the loan ASAP (and that means sending any extra cash I have towards it), improve my credit score using the resources available here, and try to refi in 6 - 12 months. Even if you buy another car, as the poster above laid out, you will be eaten alive with the negative equity and I'm not so sure you'd get a rate that much different unless your FICO improved in the interim at which point you could just refi.
ya its crazy i dont know how my borther got 2% with his credit and it was from toyota, so who knows, but yea thx for all the advice, looks like ill jsut slow it down and be patient heh.