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Hey Everyone! I have been a member for a while now and seriously surf these message boards everyday! I have learned SO much from this community and I hate to have my first post be a question to everyone, but i am in need of some expert opinions. Last year My credit was not good. I needed a car so I went to the dealership and bought a 2009 honda civic ex. It is financed through Santander Consumer USA. ( I know... I know....) Since then My credit has gotten better! I went to the ford dealership today and was approved to purchase a truck. Ford Motor Credit would finance me at 7% not the best not the worst but considerably better than my 18% interest right now it makes me absolutely sick everytime i make a payment seeing that almost 90% of it goes to Santander and that just doesnt sit well with me. In your opinions - what should I do? I am 6500 upsidedown on the civic and dont really want to roll negative equity into a new loan. Maybe there is something I am not thinking about!
By the Way I have never missed a Credit Card payment - I have never missed a Car payment and I am current with EVERYTHING! I am extremely embarrased that my rate is 18% so please dont rub it in Thanks in advance for everyones help!
Welcome to the forums !
Is there anyway that you can refinance the honda so that you can pay it down before you decide to sell it ? Rolling this much negative equity into your new loan is going to make it harder for you to pay the loan down if you buy a new car now, and you'll have the same issue in the future if you try to sell it, due to the combination of new car depreciation and negative equity.
thanks for the advice! I would love to refinance it. I have been looking up information on how to refinance - but i feel like an ameture when it comes to this kind of stuff (mid 20s) parents didnt really dig deep when teaching me financial information. I was under the impression that when that upsidedown it would be hard to refinance without bringing tons of money to the table? is this true or no? I heard the loan to value has to be proprotional. any truth to this statement? where should I start?
Yes, banks won't loan you more than their valuation of your car, however they might use a book value that is better than a trade~in value, so you might not be in the hole as much as you think you are. I'd start with a local credit union or bank and talk to them about refinancing.
I am a very similar situation...I'm about 5k upside down and with all the current rebates I'm strongly considering taking advantage of them with an F150 or Ram. Honestly, if you love the new vehicle and don't like your current car, and your new payment is reasonable then I see no issues. For me my payment will stay similar, however instead of 25 payments left I'll have 72...but I'm fine with that since its a brand new car, and what I want. What I drive now also is thru Santander 16% and in 5 years I'm still at 10k payoff on a car I paid 17k for...its so sad
Have you thought of selling the car yourself... you are probably not as "upside down" as you think. Last month 4 different dealers kept telling me I was 1-2k upside down on my 08 350z before I decided to sell it on craigslist. I used dealer retail prices as a guide and I it sold in 3 weeks and I CLEARED $5000 to my pocket. That my friend is the dealers markup $6-$8k.... on a $18k car. Do it yourself and you will see you are not in that bad a shape.
I was in the same boat. I had 2 loans with Santander. Once I got my credit cleaned up some I went to my banker. She rolled both car loans into one and dropped the percentage by 14%.
Thanks everyone for the replies and the kind words! So I think what I plan on doing this week is going to a credit union and opening an account establishing memership. at that point I will apply to refinance and hope for the best! im sure they will be able to beat the god awful 18 percent im at right now. My credit still isnt rock solid but I have a few prime cards in my wallet and am certainly going in the right direction with being virtually debt free these days. Is there anything in perticular that I should say or tell the banker ? those who have refinanced can yall give me a run down on the process? thanks!
I had actually bought a new home. My loan officer at the bank told me to come back in a month and let's do something about the high percentages on the car loans. I went back in a month and she did.