Just did REFI with PENFED

[Creditdummy123]

Hey guys,

Just did a refi with Penfed. I purchased a 2017  Dodge durango back in Aug 2018. My credit wasn't good but I needed a car because my old one was falling apart. Only bank that was able to approve me at the time was Capital One. I was super greatfull because I needed the car but the interest was 10.85% for 72 month loan. I knew it was too high and eventually needed to refi the loan. Did my research and decided to go with Penfed. I tried to refi back in Jan 2019 but was denied. They said my score was too low and my utilization was too high. Kept working on rebuilding my credit and decited to reapply yesterday. The application was on hold for review. This morning, woke up with an email saying my loan was approved. When I logged in, it shows that I was approved for the full requested amount at a 5.9% interest rate for 60 months. Super happy. That changes my monthly payments from $517 to $459. I am used to paying $567 a month (extra $50 to principal). My plan now is to continue paying the same amount, hopefully if they allow it, break it down into bi-weekly payments to save more on interest. if everything goes according to plan, it would be like financing at 4.27% and I should end up paying it in 3.7 years instead of 5.

I have not gotten an alert yet but they told me they pull from Equifax.

Current Equifax score is 671 (They told me that I need a minimum of 650)

Utilization at 33%

1 Account in collection

2 negatives

Hope this helps

[tbque]

Congratulations on the Refi!

[Fico82]

Perfect example of a refi ! , you are doing a great job . Congrats !

[Shooting-For-800]

Congrats!

[Anonymous]

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@Creditdummy123 wrote:

... Hope this helps

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It does -- great informative post. Thank you.

And Congratulations! on your approval. 

[DaveInAZ]

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@Creditdummy123 wrote:

Hey guys,

Just did a refi with Penfed. I purchased a 2017  Dodge durango back in Aug 2018. My credit wasn't good but I needed a car because my old one was falling apart. Only bank that was able to approve me at the time was Capital One. I was super greatfull because I needed the car but the interest was 10.85% for 72 month loan. I knew it was too high and eventually needed to refi the loan. Did my research and decided to go with Penfed. I tried to refi back in Jan 2019 but was denied. They said my score was too low and my utilization was too high. Kept working on rebuilding my credit and decited to reapply yesterday. The application was on hold for review. This morning, woke up with an email saying my loan was approved. When I logged in, it shows that I was approved for the full requested amount at a 5.9% interest rate for 60 months. Super happy. That changes my monthly payments from $517 to $459. I am used to paying $567 a month (extra $50 to principal). My plan now is to continue paying the same amount, hopefully if they allow it, break it down into bi-weekly payments to save more on interest. if everything goes according to plan, it would be like financing at 4.27% and I should end up paying it in 3.7 years instead of 5.

I have not gotten an alert yet but they told me they pull from Equifax.

Current Equifax score is 671 (They told me that I need a minimum of 650)

Utilization at 33%

1 Account in collection

2 negatives

Hope this helps

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Congrats on the excellent refi! And interesting idea on the bi-weekly payments, but I doubt if they'll allow it. When they write up a car loan the stated monthly payment is considered the "minimum payment", you're free to pay more than that but not less. Just pay early and/or make additional payments against the principal. And most car loans will let you 'get ahead' of the payments - for example if the payment is due on the 15th you could make the Aug. 15 payment today and then pay the Sept. 15 payment on Aug. 15. You're saving interest plus if an unexpected cash crunch occurs you wouldn't have a payment due until Sept. 15.

[Creditdummy123]

I will check whenever all the paperwork comes in. I know that when I asked capital one to lower the rate, they said they were not able to but that I can make bi weekly payments and that would be like lowering the interest as long as the minimum payment is paid by the due date. I never took advantage of that then because I was concentrating on paying down other debt. But that advice actually came from capital one. Afterward I did some research and it is a thing and that most places let you do it. It has something to do with the daily accumulated interest or something like that. So the sooner you make any sort of payment the less interest you pay. They dont put you on any sort of plan, you just do it. I will keep you guys posted when I find out.

[Creditdummy123]

Received the paper work. It explains how the daily annual percentage is calculated (breaks it down to daily) and it later states: "If I make payments prior to their due date, the finance charge will be less than stated above, since finance charge is applied on a daily basis."  called Penfed and asked about the bi weekly payments to confirm. They pretty much said the same thing as Capone. As long as the full payment comes in by the due date, you can do bi weekly payments. In addition to saving on interest, you end up doing one extra payment per year. So you will end up making 13 full payments vs 12 payments a year.  

It's going to take some effort but going to try my best to stick to the plan.