@SubstandardAndPoorers500 wrote:
I'll keep that in mind.
I think I'm going to apply for a personal loan through NFCU, and then use that money to drop on the vehicle for a refi. I just found out I'm going to be returning early so I feel pressure to do something, because as soon as I'm back in the driver's seat my car's value is going to tank from all the miles I drive. Is this legal/ethical? NFCU would be none the wiser, a $7,000 loan would put me approximately at about 119% LTV. I'd refinance that, and my payments would be what they are. My goal is simply getting to a lower payment combined between the car and the personal loan. I'm hoping I should be able to shave off about roughly $100 a month. Would anyone say that's worth it?
There is nothing wrong with applying for a personal loan and using those dollars any way you choose to. Your in a tough spot with this car, I have been there also because years ago I rolled negative equity into a new car that like all of them depreciates etc. One thing we rarely consider when we do these deals is that the negative equity plus transaction costs plus the regular (huge) depreciation new cars take in the first three years really add up. You state you have a GAP insurance plan, you should note that GAP insurance is capped so it is likely that even with GAP if you suffered a total loss you there is likely a portion of this debt that would not be paid by them. It would be worth taking a look at that paperwork.
I think you have a few things to consider here. Your scores are on the low side so some serious attention to rebuilding your scores would really pay off in the future. Again I have been there and the good people in the rebuilding section here have changed my life by helping me build solid credit which opens many doors.
I would do some rebuilding and see if I could get a bump in my scores, do a personal loan or CLOC with Navy to reduce your negative equity and the interest on that portion of the auto loan. If you can refinance after that then I would be careful to not extend the term, in other words if you have 60 months left on your current loan don't get a 72 month refinance. Fact is even with a refi you will still have negative equity, you will drive this car so your using it which is what they are for. I would settle into the reality that to not waste a ton of money you will need to keep it not only until its paid off but for a few years after. I would ignore advice to trade it in and let a dealer work their magic, that will end up making everything worse and while its always nice to have a new car add up those transaction costs and take a look at the depreciation on Edmunds.com for that car in the first three years and you will see what that transaction would really cost you.
