Refi Negative Equity with NFCU

[Anonymous]

Hello all,

I have a question about refinancing an auto loan; about two years ago I got an auto loan through NFCU for $45k at 10% interest - terrible rate for sure, but I am happy to have learned from that mistake and I am being a lot more cautious. I currently owe $33k on the car with a private party "fair condition" book value of about $24k - last year we were hit by another driver (side impact going 50+ MPH) and damages totaled around $12k for my car, but the car wasn't written off. I can only assume this would have destroyed the value of the car even further and the other party's insurance was kind enough to only give us $500 in deminished value (if you can't tell, I'm rolling my eyes...).

Anyway, a Navy Fed rep said I can always fill out an auto-refi app and refinance an existing used-car loan with them, but I'm afraid it'll be a waste of a hard pull since I owe way too much on the loan. I know new lenders only finance 100-120% of the loan value, but if the refi is with the existing lender would there be any exceptions to that? Both my regular FICO scores and all of my FICO Auto scores are 80-100 points higher than when I bought the car - my FICO Auto scores are in the low 700s so I know I'd qualify for a very low rate. I'd like to lower my payment to improve DTI for a house purchase towards the end of 2021. 

Thanks all! 

tl;dr - Auto loan is with NFCU, owe $33k, car is worth maybe $20k at best. Want to refi for better rate and lower payment, will existing lender possibly waive the 100-120% LTV rule? 

[DebtStinks]

I don't know about any exceptions that can be made for an internal auto refi, but...

Navy loans off retail value for used, MSRP/window sticker if New...

They loan a max of 125% of said value based on NADA (if used)

I'd first start with NadaGuides.com and book out (with all options and miles, etc) paying attention to the highest number which should be retail value...multiply that times 1.25 and that will give you the max amount you can borrow on the vehicle from NFCU. I'd also recommend going with their GAP coverage being so far upside down...it's usually $400-500 one-time non cancelable coverage with most credit unions.

Best of luck!

[dunn2500]

they pull from TU FICO 9 now

just had it done.....so check that score from your original loan

[Anonymous]

Thanks for the information! I purchased GAP insurance when I bought the car.

I'll check the NADA value... I only looked at KBB value but it's very nice to know that they use NADA up to 125%, I may actually be able to refi once I pay down the car with my tax return this year!

Edit: It looks like NADA retail is just over $27k, 125% will be $34k which is where the car sits as of right now! I'll still pay down the balance with my return, but it looks like I'll be fine after all! Thanks for the info @DebtStinks!

Good note on the TU FICO 9 score as well! 

[Anonymous]

Hi,

 I'm in the same boat and just reached to NFCU to refinance my current auto loan. I got hit with the "under review" message. Did you refinance yours and if so, what's your new rate. My credit is much better, but I'm so upside down in this car. 

[Mad12345]

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@dunn2500 wrote:

they pull from TU FICO 9 now

just had it done.....so check that score from your original loan

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Is it TU FICO 9 or TU Auto enhanced FICO 9.

[dunn2500]

actually i just found out they used fico 9 standard in my case.....before it was EQ 9 auto....but their letter they sent was right inline with my fico 9 standard of 715....believe my auto is 730-740 plus, 

[Mad12345]

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@dunn2500 wrote:

actually i just found out they used fico 9 standard in my case.....before it was EQ 9 auto....but their letter they sent was right inline with my fico 9 standard of 715....believe my auto is 730-740 plus, 

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[Mad12345]

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@Mad12345 wrote:

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@dunn2500 wrote:

actually i just found out they used fico 9 standard in my case.....before it was EQ 9 auto....but their letter they sent was right inline with my fico 9 standard of 715....believe my auto is 730-740 plus, 

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Thanks for the reply.