Refinancing question for the gurus.

[ibmrad7]

Quick question folks, how soon can one refinance a loan?

Numbers are: current loan with 3.26 for 72%, my friend hasnt made a single payment yet.

                       possible loan: 2.49 for 72% months.

His car is 42K and he finance 27K @ 3.26 at the moment.

[pipeguy]

You can refi anytime you want as long as you qualify - say DCU's 1.99 or 1.49% - why not?

That said, take a look at the loan terms and see if its worth it as far as building a relationship with a lender (say your local bank or CU) for half a point or so, there are things to consider. That said if its some generic lender and you can save enough money in payments and over all, why not refi ASAP? Also read your finance contract some lenders used to add a pre-payment penalty, mostly non-prime lenders, but something to check.

[ibmrad7]

Thanks pipeguy,

             His whole motivation is to build relationship with his CU. Current lender is Wells Fargo Dealer Services, which is nothing but a major bank with no personal ties. CU offered him a 10K card and loan for the same pull.

[pipeguy]

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@ibmrad7 wrote:

Thanks pipeguy,

             His whole motivation is to build relationship with his CU. Current lender is Wells Fargo Dealer Services, which is nothing but a major bank with no personal ties. CU offered him a 10K card and loan for the same pull.

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Given that his rate is pretty good, if it was me, I'd keep the loan for a year then call WF and say I have an offer to refi my car loan at 1.99% through DCU which I'm thinking of taking to same me $xxx over the life of this loan - is there anything you can do to drop my APR on this loan?. Now keep in mind that big lenders securitize their loan porfolios so changes are they don't even own the loan and only get paid a percentage for servicing the note. This way you gave WF a heads up and chance to match, if they say no which is most likely, then go ahead and refi. WF should be happy to continue the CC business and although big banks don't take these things personal, I don't think it will hurn your relationship with them - wait 6 months if you like, but I would not do it right away if you want the history with the lender. 

One other note, if a dealer placed this loan for you, he's going to lose some/most of his back end profit - HE won't be happy, that's kind of a bonus in my book.

[ibmrad7]

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@pipeguy wrote:

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@ibmrad7 wrote:

Thanks pipeguy,

             His whole motivation is to build relationship with his CU. Current lender is Wells Fargo Dealer Services, which is nothing but a major bank with no personal ties. CU offered him a 10K card and loan for the same pull.

---

Given that his rate is pretty good, if it was me, I'd keep the loan for a year then call WF and say I have an offer to refi my car loan at 1.99% through DCU which I'm thinking of taking to same me $xxx over the life of this loan - is there anything you can do to drop my APR on this loan?. Now keep in mind that big lenders securitize their loan porfolios so changes are they don't even own the loan and only get paid a percentage for servicing the note. This way you gave WF a heads up and chance to match, if they say no which is most likely, then go ahead and refi. WF should be happy to continue the CC business and although big banks don't take these things personal, I don't think it will hurn your relationship with them - wait 6 months if you like, but I would not do it right away if you want the history with the lender. 

One other note, if a dealer placed this loan for you, he's going to lose some/most of his back end profit - HE won't be happy, that's kind of a bonus in my book.

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  You nailed it. His dealer is pissed Lol.