Refinance my auto loan at a small Local Credit Union

[Bdh1975]

I hit a deer coming home from work at 1:00 a.m. back in January and totaled my Hyundai Santa fe. Had to have a new vehicle immediately because I live way out in the country and it's an hour commute to work. I had my heart set on a Volvo XC60, and I found a great deal on one and my credit union financed it for me but at 17.49%. The current loan payoff is $14,650, payment is $455/mo for 43 more months.

My husband of 20 years had passed away a couple days before Christmas back in 2022. When I lost him my finances took a major hit and my score cratered due to loss of his income as well as joint accounts but now I needed to pay by myself. I remarried in September of last year and have been working hard on my credit now that I'm back to being a two income family. I've actually raised my score my actual FICO score by about 75 points to 640 on Equifax and Transunion. My experience is still really bad at 595. I just started a new job this month working for a non-profit as a healthcare social worker. My own income is about $53,000 a year, and my husband's income is from self-employment and fluctuates wildly so I don't plan on trying to claim his income or prove his cash flow,. Nor do I plan on putting him as a co-applicant. I have three Capital One cards, and a Discover card, and another auto loan on my truck, balance is about $7,000 left. Payment is $306 a month. That loan is actually through a local Finance Company and I had to take it out to pay for the funeral and headstone for my husband that passed away. My utilization is killing me as all my cards were maxed out from when my husband passed away up until 3 months ago or so. I've got my utilization down to 75% and it's steadily going down. Total balances on unsecured cards is somewhere around $3,500. 

I would love to get some advice from the good people on this board on whether or not I should try to refinance. I did do some pre-qualifications and I was given several offers ranging from 8.25% for a 48 month note to 12.5% also for 48 months (still very high but five points less than what I now pay). Am also a news junkie and have been watching the Fed closely to see if a rate cut might be happening, although to get the minimum of -5% it'd be worth it I think to refi now anyway, right?... 

I would just like to know if y"all think it's a good idea to refinance now, if I should wait until my utilization goes down some more in a few months (say late fall this year), and if you have any suggestions on a loan marketplace or a vendor/creditor that would be amenable to approving a refi at this point in time.  

Thanks all and have a great day! 

[boxmover]

I'd like to suggest contacting an auto loan broker... as one was able to find an obscure small cu in another state & get my loan refinanced from ~20% to 5.5% on a car loan at the time that was ~$10500 balance on original $13500 loan. As I recall there was an origination fee (finders fee?) of ~$800 and a $5 or $50 deposit to open a savings account at the same cu.

My fico scores took a temporary hit, recovered in about 3-4 months. They were NOT good at the time & I've no doubt there were some collections and unpaid charge offs on there at the time.

I've no idea how to find an auto loan broker. I had filled out a prequal somewhere and foolishly agreed to texts/calls. Many called me, only the first 3 calls were answered, then I learned how to block calls on an iPhone. One guy had really convincing follow-up texts. I gave him a shot and he was brilliant.

If this is not good advice, I sincerely apologize. It worked out great for me though, so sharing.

[Bdh1975]

This is actually exactly rhe kind of advice I was hoping to get here I the forum.  I did go ahead and try to get the 8.25% loan with Way.com that Credit Karma said I was prequal'd. Good luck t a call shortly thereafter and like your experience the guy was real nice and seemed to know his stuff.  But then he groaned and said shoot you live in Mississippi...  Turns out that broker only works with one lender in this state and that lender has a specific minimum FICO score require that I was a whole whopping two points short of reaching haha!  So throwing an extra chunk of cash on a card to lower utilization more and hoping that'll get me those two points in a couple weeks' time. He sent me a text message with his contact info so I can call as soon as I see my reports update after the statement cuts on the 7th.

Thanks for the reply! 

[Yasselife]

Given your current situation, refinancing could still save you money even with the offers you’ve received in the 8–12% range. Dropping from 17.49% to even 12% means less interest over time and a slightly lower monthly payment, which could free up cash to help pay down your credit card balances faster.

However, your utilization is still high at 75%, and lowering it further before applying could help you qualify for a better rate. Since your score has already risen significantly, getting it up another 20–40 points by knocking your utilization closer to 50% (or ideally under 30%) could be worth the wait if you have the ability to pay down more in the next few months.

That said, you also have to weigh the cost of waiting. Every month at 17.49% means you’re paying a lot in interest. If the offers you have now will save you a good amount over the remaining 43 months, it may make sense to lock in the lower rate now and then refinance again later if your score improves further and rates drop.

You might also want to check with larger nationwide credit unions like PenFed, Navy Federal (if eligible), or even online lenders that specialize in auto refinancing, as they can sometimes beat local CU rates for borrowers who have shown recent credit improvement.