Newbie to Auto Refinance

[Anonymous]

Hey guys so I tried to look up around the forum for some info but I have not found anything on exactly how to refinance and when to do so. I got approved 5 months ago on my auto loan with Captial One Auto for $24k @ 9.0% I would like to refinance to bring the APR down to maybe a 3% or lower. The past five months I have improved my credit profile but I just don't know where to start. Or what the process is like. Any advice welcomed. Thanks!

[Appleman]

Welcome to myFICO.

I will start with a response to get the ball rolling.

First you need to determine the current value of your car. You can get a rough idea looking at Kelly Blue Book or Edmunds. Look for the value of dealer trade in. You can also call your local bank or credit union and see where they would value the car for a refinance.

Some banks will loan you 100% or even 110% of book value on a refinance. My guess is you are probably upside down on the car. This simply means you owe more than your car is worth. Very common for the first 1-3 years of payments.

Next make sure that your revolving balances on the credit cards are staying below 10% for the ideal boost to your credit score.

You may want to go ahead and get your actual FICO scores with versions here at myFICO. This will give you an accurate view of your credit report.

People have had good luck with re-finances at DCU (Digital Credit Union), NFCU (Navy Federal Credit Union) and PenFed (Pentagon Federal Credit Union). Have a plan and do a lot more research prior to going for a re-finance. The higher you push the score the better the chances for a re-fi.

Good Luck!

[Anonymous]

Thank you for the respsonse and welcome to the forum! I have made a couple of double payments in 1 month so the loan was for $24k and I now owe $22k in just 4 months of owning the car. It is a 2017 Mazda 3 Grand Touring again at 9% with Capital One Auto Finance. 

I could possibly have maybe $500-$1000 of equity in the car but not by much so definately not upside down.

I'm confused, so I pay $30 a month for myFICO scores from this site. Are you telling me these aren't even my real FICO scores? Where would I get my "real" FICO?

[Anonymous]

Ooops I apologize, I misunderstood what you said. So which version of myFICO would you recommend I focus on for a refinance?

[Anonymous]

With rare exceptions refinancing with a good credit union is the way to go.  DCU, Penfed and NFCU are all excellent options.  As Appleman says it is a good idea to know the loan to value ratio because that is a common reason for denial but as long as your around 100% you should be ok.  Anyone can join DCU or Penfed so those are likely your best options, both offer rates around 3% for 72 months but rates have been increasing this past year so chances are fairly high you won't be able to get a sub 3% rate with your scores but I suspect you can cut the interest in half which would save you thousands over the life of the loan so it is well worth doing.