Refi with 175% LTV?

[SubstandardAndPoorers500]

I have a feeling I'm stuck. I got an auto loan through VW Credit for 33K back in 17 at 16.99%. I planned from the get-go to just refi in 6 months to a year. I had 1 "late" payment due to the Hurricane Irma right in 17, but I believe VW fixed that. Other than that I've bee on time. The problem is, no matter where I go, it doesn't seem to be an issue of credit necessarily, but my LTV is at 175%. I already see from the loan that for every $100 I knock down on the principle, I pay about $100-$150 additionally in interest. I'm kind of at wit's end on what to do. I'm military, so the only way I could see an end in sight is to re-enlist for some fat bonus and refi then, but I'm growing weary of Army life. Is there some lender out there that I should look into? Do I need to try and take out a large personal loan to try and knock down the LTV? If not, I'll be credit card debt free after tax refund comes in, and I'll just be resigned to try to pay extra on the principle until I hopefully can finally catch a break.

[Remember0]

Sorry to hear you are feeling at your wits end.

Can you share a bit more details:

-Are the current FICOs in your score accurate?

-What car is it exactly (year, make, model, and appx. miles)?

-What is the current principal balance you owe to VW Credit?

Finally thanks for your service. I'm sure you already have looked into this, but if you haven't looked into SCRA protections, please clarify if you purchased the vehicle before you joined the military or if it was after you joined.

[SubstandardAndPoorers500]

The only FICO I could probably say is accurate is Experian, since I pay them for their credit monitoring. The others are based on free reports. The car is a 2017 VW GLI with 40k miles. I drive a lot, and being from Florida and stationed in Kansas doesn't help at all. I racked up about 5500 miles in the month of December alone visiting family. The issue is my previous car I rolled about $5500 in negative equity(car having high miles and an accident) to my new loan, added in with the high interest rate I got a double whammy. I purchased the car after I entered service, and even though I'm currently overseas, I asked VW Credit for SCRA just to see what they'd say and they declined, which I understand they have every right to do so. My principle balance is $31,572.12, so really haven't paid anything but interest really.

[Remember0]

Yes, I think VW Credit is able to decline if you bought the vehicle after you entered service.

I show NADA retail on this vehicle at $19,625. At a CU like DCU, they would refi 120% (though they might not work with your scores) so that equals $23,550.

As you stated, this leaves you with a ~8k hole and I'm frankly not sure there is an easy way to bridge given the scores. (Any personal loan you borrow would likely be at very high interest.)

This is a longshot: Have you tried calling NFCU (who'd work well for your scores) and asking just how much they are willing to lend? No need to apply, I hear they are friendly and can take down your car info and tell you amount they can refi. At least that way you know how much in the hole you are.

Perhaps other members in your shoes will have other ideas, but unless there is some way for you to borrow $7 - 8k on a personal loan at reasonable terms, I just don't see how this gets refi'ed.

[Remember0]

Sorry for multiple replies...I'm just wondering if NFCU maybe would be willing to give you a personal loan for the difference? Their highest interest rate on personal loans is 18% and your income is pretty much as solid as they come so it's not a terrible loan to make.

Since your VW Credit APR is 17%, it would make sense to take a personal loan at 18% for the underwater amount to potentially save a lot of interest on a refi'ed auto loan.

I am somewhat grasping at straws here, but short of you coming up with $7 - 8k, I think NFCU is one of the few (only?) lenders that may be able to make this work (still a bit of a moonshot). But I don't think you have a lot to loose by calling them and asking. They may not come up with the auto loan + personal loan idea when you call them but you can try seeding in their head to see if in the art of possible.

[SubstandardAndPoorers500]

I did try that initially with NFCU and USAA. The lady with NFCU finally told me frankly their LTV is 120%(after being denied twice in the past), and I believe USAA based on the parameters they gave me(through a counter-offer) are probably at 120% too, possibly 130%. I think the personal loan may be the best way to go then. I may start scouring the Personal Loan board to see if I can find any lenders that may work with my scores. I can afford my car payment as things currently sit, and I must be doing something right as I'm about 30 days away from being Credit Card debt free. I'm thinking more long term as I have roughly 18 months left til I get out of the Army, and while sure I can move back in with family, I'd prefer not to. But this car payment is going to have to go down first. I may see what I can do to pay extra on the principle, and then right before I leave the military look into a personal loan where my scores should definitely be above 650 across the board. My "nuclear option" would be maybe adding another 12-18 months on to my contract just for the purpose of getting a small bonus that I can add some cash to if necessary to get below 120%.

[Remember0]

Sounds like a good plan.

Congrats on paying off your CCs. Maybe once they are paid off, you can take some of the money you were using to pay down CCs and direct towards the auto loan? Any amount will help especially at the high APR to bring down principal.

BTW you never really mentioned why your scores are in the 630s? Mind if I ask? Once I knew of someone in a similar position and it turned out it was 5 medical collections and given he had some cash to work with, I sent him a PM with instructions and he was able to get down to 1 collection on his report and increase FICOs pretty significantly.

[SubstandardAndPoorers500]

My scores are mainly from mismanagement of credit back in my early 20s. I have maybe 4 collections left on my reports but I'm not sure if I should pay them off or ride them out to the 7 year mark. My focus has been on the active accounts so far.

[Remember0]

Got it, that makes sense. If you become interested in trying to see if they can be removed, there's a lot if resources here (and on the competing credit forum if I'm allowed to say that) you can research. Sometimes though, especially if they will fall off sooner than later and the amounts are substantial, best to let a sleeping bear lie and focus on active accounts.

[Remember0]

To add: just paying them off won't help too much I suspect. If you're willing to pay, I'd recommend you do so only after negotiating a pay for delete (PFD) with them. There's guides here and elsewhere online on how to do that.

The decision of whether it is worth it to PFD or just let them age off is up to you.