Refi a Capital One Loan?

Anonymous · ‎01-05-2009

Happy 2009 to everyone! I have worked hard getting my credit score up and would love to lower my payments on a car loan with Cap One. I owe 25k at 12.95%. I have 53 payments left, originally was 72 months. When I got the loan my credit scores were around the mid 500's now I am in the high 600's around 685. The catch is, I believe the car is worth about 22K. I would be willing to put a down payment to absorb some of the negative equity. What would you do in my situation? Or should I just try to score super low financing and trade it in?

2008- paid off cc, bought first home

2009- get rid of the Capital One car loan!

Anonymous · ‎01-05-2009

I don't know what kind of interest rates are out there right now, but I refinanced my loan after 5-6 months and lowered my interest rate by 7 percent. You should check and see how much interest you are paying on your loan, because you may have already paid most of the interest. It might be better to just spend the money you have reserved to pay down the principal.

Anonymous · ‎01-05-2009

The current Cap 1 loan is at 12.95% interest with 53 payments left at $650 per month.

Anonymous · ‎01-05-2009

@Anonymous wrote:
Happy 2009 to everyone! I have worked hard getting my credit score up and would love to lower my payments on a car loan with Cap One. I owe 25k at 12.95%. I have 53 payments left, originally was 72 months. When I got the loan my credit scores were around the mid 500's now I am in the high 600's around 685. The catch is, I believe the car is worth about 22K. I would be willing to put a down payment to absorb some of the negative equity. What would you do in my situation? Or should I just try to score super low financing and trade it in?

I would throw as much extra as you can at the loan until you can get right side up with it. Then refinance.. Or since you have a down payment, offer to bring that to the table when you apply to refinance. Rolling negative equity into a new loan is a horrible path to take. You'll likely start yourself on the path of rolling more and more negative equity into each subsequent loan. It's a losing game since cars depreciate so quickly. Way to go on your scores!