Hi all,
I bought my first car with little credit, resulting in a 18k loan at 20% interest for 6 years. Obviously this was a terrible decision but it felt like a good deal at the time because I needed a vehicle. Fast forward a few years and I am now around 5k or 6k upside down on the loan, pretty much eliminating any chance of refinancing (without a very large payment to principal). My credit score, however, is a great deal better, and I have been approved for a 25k loan from my credit union at 4% interest rate. I would very much like to trade in my current car for a larger suv/truck for work.
I have read through a few posts and saw that typically rolling over negative equity into a new loan is an awful idea. In this case however, even if I used the total amount I am approved for I will end up paying less per month for a loan of the same duration I have left on my current car. In this case would rolling over the equity be an acceptable idea? Is there anything I should know going in?
Thank you for the help, this is my first post.
