NEW CAR LOAN: Did I make a mistake?

Anonymous · ‎03-10-2015

Car loan thorugh KIA Finance at 8% interest rate. First payment on April 3, 2015. How long should I wait to refinance? Should I try now before it hits and lower my score? Should I sit it out for 6+ months and try to increase my score and then refinance? Credit Scores are in the low to mid 600s. I did not try to go through my banks.

TRC_WA · ‎03-10-2015

Should be good to refi in 6 months. Not a bad rate given your scores...

FICO8 current as of : 10-20-25 EQ: 736 TU: 728 EX: 722
Hard INQs last 12 months: EQ: 0 | TU: 0 | EX: 0
Verizon Visa $8500 Amex Delta Reserve $10,000 Care Credit $18,000
NFCU CashRewards $7500 Apple Card $7000 Best Buy $8000 Amazon $5000
NFCU auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) 6.95%
NFCU motorcycle loan (2024 Harley Davidson Road Glide - Alpine Green & Chrome) 9.45%
Total CL: $64,000 --- Total CC UTI: 31% --- AAoA: 6.5 years --- Income: $200k
Last app: 4-6-24

karn101 · ‎03-10-2015

You didn't make a mistake. Just looks like you didn't haggle much because you could have been lower. I got 3.9% through Hyundai when I had the same scores. Difference was that I had a pre-approval by my credit union at 4.9% and the dealership wanted to beat it.

Like said above, refinance in 6 months or sooner if you want. You'll be fine.

SamsungHDTV · ‎03-10-2015

@Anonymous wrote:
Car loan thorugh KIA Finance at 8% interest rate. First payment on April 3, 2015. How long should I wait to refinance? Should I try now before it hits and lower my score? Should I sit it out for 6+ months and try to increase my score and then refinance? Credit Scores are in the low to mid 600s. I did not try to go through my banks.

I will respectfully disagree with the above posts. Mistake highlighted in red. Always go rate shop through your banks or credit unions first, and then allow the captive lender a chance to beat the rate. If you applied recently (within the last 2 weeks), I would try to refinance now so that it doesn't hurt your score. But please note that it will count as multiple inqs for other purposes. Its possible already got the best rate given your profile, but its also very possible you actuallly can get a better rate now.

If you want to go option B - try to increase your score, but dont wait a set number of months. Just refinance as soon as your score bumps up 'significantly'. In quotes because significantly really means whatever score so that you can get into a better credit tier at a lender.

Anonymous · ‎03-10-2015

I agree the only mistake is having not checked with banks or credit unions, having said no harm is really done. You can finance with a bank right now if you want to give it a shot, perhaps DCU even. My suggestion would be wait till your scores hit maybe 660 and then do the refi. Your scores are likely similar to mine perhaps a bit better and I just refinanced to 8.5% for 72 months from 12.57 when my scores were in the mid 500's last summer. I plan on doing another refi for a 60 month loan later this year when I exceed a 670 across the board and hope to come close to cutting that 8.5% in half.