hello all

[wrxlover2]

hey guys im just doing some research for a friend right now he has an auto loan through santander at a sad rate of 24.98

the loan was opened on june of 2012

hes made his payments every month which are 466 and its a 72 month loan

the loan was orignnaly opened for 17302 i believe and thats where its stayed give or take a couple of dollars

now apparently the loan company wont tell him the answer to my question or maybe hes to nervous to ask

but my question is, since he has a high apr is having to pay all the interest off first before his actual balance will be lowered

is that why its taking so long for the balance to drop even though hes paying each month?if anybody could provide any insight itd be greatly appreciated

thank you!

[azguy13]

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@wrxlover2 wrote:

hey guys im just doing some research for a friend right now he has an auto loan through santander at a sad rate of 24.98

the loan was opened on june of 2012

hes made his payments every month which are 466 and its a 72 month loan

the loan was orignnaly opened for 17302 i believe and thats where its stayed give or take a couple of dollars

now apparently the loan company wont tell him the answer to my question or maybe hes to nervous to ask

but my question is, since he has a high apr is having to pay all the interest off first before his actual balance will be lowered

is that why its taking so long for the balance to drop even though hes paying each month?if anybody could provide any insight itd be greatly appreciated

thank you!

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Hello back at ya. 

Yes, that interest rate is absolutely killing your friend. Your friend is paying MUCH more interest than principle. Your friend needs to refi as soon as he/she can. If your friend makes all his/her payments on time for 72 months, they are paying $33,552 for a $17,302 loan. That is why the principle balance is not dropping much

[guiness56]

Shouldn't the loan documents say how the payment will be allocated?

[wrxlover2]

oohh ok thank  you for confirming my suspicion az guy,

as far as him refinancing he doesnt have the greatest credit and right now his loan is more then the car is worth,does he even have any options for refinancing?

[azguy13]

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@guiness56 wrote:

Shouldn't the loan documents say how the payment will be allocated?

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I would guess the loan documentation should break down the payments. If it is like most other loans, most of the payment will go to interest the first couple of years. 

I really hope the OPs friend can find a way to refi. If at all possible, pay extra on the principle with every payment. 

[wrxlover2]

agreed i apologize its just early in the morning and this is bothering me and i didnt want to just call and be like gimme your loan documents!

is it possible to refinance when you owe more then what the car is worth?

who is best to refinance with?

[azguy13]

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@wrxlover2 wrote:

agreed i apologize its just early in the morning and this is bothering me and i didnt want to just call and be like gimme your loan documents!

is it possible to refinance when you owe more then what the car is worth?

who is best to refinance with?

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I am by no means an expert when it comes to auto loans. I am more of a rebuilding/credit card guy. However, I would assume that not many lenders would be willing to refi a vehicle for more than its value. I know of some lenders like Harley Davidson will finance 125% of the vehicle but they are in a cetegory of their own. 

After a quick search, it looks like PSECU will finance up to 130% of a vehicles value. I would definitely look into different Credit Unions. 

[wrxlover2]

ok great thak you so much for all of your great assistance azguy ill forward this over right away to him.