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Impossible refi

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Valued Member

Impossible refi

Aight so boom:

I financed a 2010 Corolla with Credit Acceptance at 22.99% under the impression I could refi in a year. A year comes and *gasp* my car is too old to refi, said EVERY SINGLE BANK. So I decided to let it go and just charge it to the game.

Fast forward to today, Capital One invited me to check for a pre-approval. (Mind you I have burned them in the past for a credit card and auto loan. They forgave me for the card and offered me a Platinum for $500. I took it and kept it cute so they offered me the auto pre-approval). I took the chance and got a pre-approval for up to $35k. The ranges for the cars I looked at APR-wise were between 9 and 14%, so they are beating the numbers I'm doing with Credit Acceptance right now.

My idea is, since I can't refinance, I might as well trade it and put the negative equity into the new deal. Seeing as the APR is still lower, I can bite the bullet for a higher payment because it will net me a newer car that actually *can* be refinanced for even less next year.

What do you guys think?
EX 551 TU 541 EQ 539 (3/2016)

EX 582 TU 570 EQ 564 (4/2016)
13 REPLIES 13
Valued Contributor

Re: Impossible refi


@ABlueShay wrote:
What do you guys think?

Plan laid out well enough. Sometimes you just gotta do what you can do; I'd do that too.  Are you in good with a local CU perhaps? Good Luck!

(with cu- after the fact)

"MY TAKE HOME PAY DON'T TAKE ME HOME"
Message 2 of 14
Valued Contributor

Re: Impossible refi

To me it sounds like you are getting into a greater debt hole and I'm not sure rolling negative equity into another vehicle at a lower interest rate is necessarily the answer. A 2010 Corolla's value should be pretty low so if you need to refinance it, you may need to evaluate your financial situation. Obviously there's a lot of data missing to determine that but ---

 

What's the balance on your Corolla?

How much debt to you have?

What is your debt to income ratio?

What are your monthly payments and interest rates on everything else you owe?

 

Message 3 of 14
Valued Contributor

Re: Impossible refi

It's more like...is this 2010 that can't get refi worth 22% til the very end, and when is the end?  But, the balance churned into the new balance at 9 to 14% on what model, age, miles THAT does have the ability to be refi in one year...IF someone will refi at a lower %= a savings, a loss, break even with a newer model....tight rope act but 22% and old, versus less than 14% and newer.

OP just needs to sit down, get the figures and go from there.  But what I'd be more concerned about is...do you have a relationship with a CU or some bank that WILL indeed refi for you in a year?

"MY TAKE HOME PAY DON'T TAKE ME HOME"
Message 4 of 14
Valued Member

Re: Impossible refi

Nah it's definitely not that deep.

I need to refinance the Corolla cause the payments are too high *for that type of car.* Maybe you missed the 22% APR part. There's no logical reason to pay APR that high *for anything* but I had to do what I had to do under the pretense I would be able to get a better number a year later, which ended up being not true.
I can easily afford the 309 per month but again, it doesn't make sense to pay that much for a 2010 Corolla. Right now, the negative equity is about 5k (which I also think I mentioned previously). Rolling that into another, newer car ( at a similar price point as my current) at a lower APR would only increase my payment by max 50 bucks (which I can handle, and pay, for another year while I build my score up even higher) and then subsequently refinance *that* vehicle to get my payments below the original 309.
If I don't do anything, I'll be paying 22% APR on this old ass car with no remedy in sight as opposed to paying a bit more on something newer to be able to get my payments lowered in a year. Makes sense to me 🤷🏾‍♀️.
EX 551 TU 541 EQ 539 (3/2016)

EX 582 TU 570 EQ 564 (4/2016)
Message 5 of 14
Valued Member

Re: Impossible refi

I'm going on Monday to crunch actual numbers, but Capital One has a whole portal where you can check those numbers in real life with actual vehicles. So that's what I'm going by.
I think it makes more sense to pay on something with a lower APR than 22%.
EX 551 TU 541 EQ 539 (3/2016)

EX 582 TU 570 EQ 564 (4/2016)
Message 6 of 14
Valued Contributor

Re: Impossible refi


@ABlueShay wrote:
I'm going on Monday to crunch actual numbers, but Capital One has a whole portal where you can check those numbers in real life with actual vehicles. So that's what I'm going by.
I think it makes more sense to pay on something with a lower APR than 22%.

I've done the Cap1 Auto Nav....pretty straight up it seems.  You can print it out and take to your dealer.  Good luck on the number crunchin' and when the time comes to refi locally, do you have a bank you can count on?  Sometimes some car dealerships work with CU's that can get you in even under the Cap1.  Good Luck!

"MY TAKE HOME PAY DON'T TAKE ME HOME"
Message 7 of 14
Valued Member

Re: Impossible refi

I haven't tried with a CU yet because I haven't found one I can get into. I'll do more research.
EX 551 TU 541 EQ 539 (3/2016)

EX 582 TU 570 EQ 564 (4/2016)
Message 8 of 14
Valued Contributor

Re: Impossible refi


@ABlueShay wrote:
Nah it's definitely not that deep.

I need to refinance the Corolla cause the payments are too high *for that type of car.* Maybe you missed the 22% APR part. There's no logical reason to pay APR that high *for anything* but I had to do what I had to do under the pretense I would be able to get a better number a year later, which ended up being not true. I did not miss the 22% part. It is definitely too high.

I can easily afford the 309 per month but again, it doesn't make sense to pay that much for a 2010 Corolla. Right now, the negative equity is about 5k (which I also think I mentioned previously). Rolling that into another, newer car ( at a similar price point as my current) at a lower APR would only increase my payment by max 50 bucks (which I can handle, and pay, for another year while I build my score up even higher) and then subsequently refinance *that* vehicle to get my payments below the original 309. If you can handle and pay it, start paying more of the principal to pay off the loan earlier.
If I don't do anything, I'll be paying 22% APR on this old ass car with no remedy in sight as opposed to paying a bit more on something newer to be able to get my payments lowered in a year. Makes sense to me 🤷🏾‍♀️.

IF possible, I would try to pay it off faster even at 9-15%.




Message 9 of 14
Frequent Contributor

Re: Impossible refi

You burn CapOne and they offer you a loan chance. My CapOne cards are all in good standing, never burned them, and I keep getting declined for reason that the cards are over the limit when they have not been in 6 months. Makes we want to burn them out of spite.
Message 10 of 14
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