WWYD...Refi or Purchase

[Anonymous]

I'm seeking advice on my current auto loan situation. After the BK dismissal, in Feb 2017, I purchased another car in May of that year. It was financed by Exeter, with a 20.24 interest rate (I know, horrible). Fast forward to now, where my credit scores have made some significant improvements, but still not where I'd like to be (I will list below). I think it's now time to get either a refi for a better rate, or trade this car in. The current car is 2016 Acura TLX (no negative equity). I'm not sure why my Auto scores are so low, I have 2 auto loans paid off, never late, and my current loan has never been late. There are no collections, on any of my reports, just paid COs. If additional info is needed, I will be more than happy to provide.

Are there any loans or leases I would qualify for better than 20.24, of course. Should I refinance this car?  Suggestions would great, and remember I need BK-Friendly.

TIA

Fico 8

TR 643

EQ 614

EX 612

Fico 8 Auto

TR 633

EQ 601

EX  616

[Anonymous]

Based on your scores, you should be eligible for a better rate if you refi. The question is whether you want to keep the TLX or get a new car. That depends on a number of factors, including whether you like the car or not. Do you have an idea of what you'd want to buy if you went car shopping now?

It would also be helpful to know about the Exeter loan you have now. How much more do you owe? How many months do you have left? Are you looking to refi primarily to lower the rate, or to lower the monthly payment?

[Anonymous]

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@Anonymous wrote:

Based on your scores, you should be eligible for a better rate if you refi. The question is whether you want to keep the TLX or get a new car. That depends on a number of factors, including whether you like the car or not. Do you have an idea of what you'd want to buy if you went car shopping now?

It would also be helpful to know about the Exeter loan you have now. How much more do you owe? How many months do you have left? Are you looking to refi primarily to lower the rate, or to lower the monthly payment?

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I'm looking at a Lexus NX300. I have 58 months left with Exeter. I owe 16k on the Acura. I'd like to get into a newer vehicle and get a lower rate. I'm fine with waiting if my scores aren't ready. I hope that answer your questions.

[Anonymous]

That's helpful. Without knowing all the other metrics that matter (payment to income ratio, debt to income, how much the TLX is worth, etc.), it's not possible to know exactly what rate you'd qualify for. In general, 58 months and $16K means you have a long way to go on your existing loan, so a refi could save you some money.

If I were you, I would check out the refi rates at my credit union and also use an aggregator site to compare my options. Some sites, like RateGenius and IFS, will do a hard pull, which could drop your credit score by a few points. I know Clearlane, MotoRefi, and Outside Financial don't (full disclosure, I'm the CEO of Outside Financial). Then I would run the same calculations for the Lexus. You could also refi now to drop your rate, keep paying it off for six months while you work on improving your score overall, and then go car shopping. 

[Anonymous]

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@Anonymous wrote:

That's helpful. Without knowing all the other metrics that matter (payment to income ratio, debt to income, how much the TLX is worth, etc.), it's not possible to know exactly what rate you'd qualify for. In general, 58 months and $16K means you have a long way to go on your existing loan, so a refi could save you some money.

If I were you, I would check out the refi rates at my credit union and also use an aggregator site to compare my options. Some sites, like RateGenius and IFS, will do a hard pull, which could drop your credit score by a few points. I know Clearlane, MotoRefi, and Outside Financial don't (full disclosure, I'm the CEO of Outside Financial). Then I would run the same calculations for the Lexus. You could also refi now to drop your rate, keep paying it off for six months while you work on improving your score overall, and then go car shopping. 

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Thank you