My wife and I just purchased a truck last week but I still can't get over the interest rate. I understand that we don't have the best scores or credit record and I expected subprime lenders but not 20% interest rate subprime. Currently my scores are: Equ ~> 588/TU ~> 604/Exp ~> 619. I don't have exact scores for my wife but her scores on the reports they pulled were between 505 - 585 from Equ/Exp.
We previously had a truck financed through a Buy Here, Pay Here lot with just under 24% interest. So our goal in purchasing a new truck was to avoid anywhere near that interest rate and to have no down payment.
The only lender that approved us was American Credit Acceptance who in my understanding is a subprime lender but we expected that considering our scores. When we signed the paperwork originally on Saturday (9/3), we signed with only $250 down and an interest rate of 22%. On Wednesday (9/7), the finance department called back and said that they had found a new bank to purchase the loan at 20% interest rate. We went in and signed the paperwork but here I am a week later still not okay with 20% interest rate.
I'm just wondering if I start looking now, if re-financing so soon is a possibility. What are my odds of approval? Where should I apply, if I do apply for re-financing? Any advice/help would be greatly appreciated.
FYI: The truck is a 2009 Ford F-150 with just at 101k miles.
Technically there is never a "too soon" to refinance. If your score/credit has improved significantly even if in just 1 month than you can refinance. Truthfully though with the information you have provided, it looks like you are in a difficult situation. Your best bet really is to figure out which bank or couple of banks will provide a good interest rate for the vehicle you purchased (meaning a used auto refinance rate). The way you go about this is first, forget about all big banks, credit unions are all you should be looking at. You want to find out what their rates are and in this case what the lowest credit score they accept for their loans. Unfortunatly your scores atm are extremely low so this will take some searching, you will want to call the banks and outright ask them what the lowest scores they approve are and that is your goal to work towards. You may have to live with the loan you have atm for a year but as long as your working on your credit, you should be able to make a significant change within that time. Dont forget to check out the credit rebuilding forums for help.