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Terms post bk

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SSH0126
Established Contributor

Terms post bk

opinions...

 

We were approved for a honda accord (2015) at 17.99%

 

cost of vehicle is $18,125 with 19,672 Miles

 

my question though is does it make a difference when selecting a 60 or 72 yr term..we are wanting to refi no later than 1 yr from now? 

 

want to be sure we are not upside down..and we drive quite a bit.fyi

Thanks for any advice

Message 1 of 17
16 REPLIES 16
Pway
Valued Contributor

Re: Terms post bk

Typically the longer you stretch your payments, the lower your car note will be.

Thank you for the wealth of knowledge I have learned from these forums. I am logging off as of November 9, 2022. I wish everyone great success.
Message 2 of 17
SSH0126
Established Contributor

Re: Terms post bk

Right so in doing so that would not necessarily make me upside when I go to refi correct? because they are only refi the principal amt and the principal and interest is that correct? 

 

It's Honda finance or American Honda so I am going to get it tmrw but I for sure need to find out what there criteria is for making principal only payments..

 

Not sure if they are requiring gap just yet..

 

 

 

 

Message 3 of 17
StartingOver10
Moderator Emerita

Re: auto loan terms


@SSH0126 wrote:

We were approved for a honda accord (2015) at 17.99%

 

 we are fresh out of bk and will be financing 

 

cost of vehicle is $18,125 with 19,672 Miles

 

my question though is does it make a difference when selecting a 60 or 72 yr term..we are wanting to refi no later than 1 yr from now? 

 

want to make sure than we will not be upside down then.


^^If you don't want to be upside down in 12 months, then put down as much as you can and make it a shorter term rather than a longer term - especially with this awful rate you are getting. The longer the term, the more interest you pay and the less principal you pay.  As an example ,if you are financing $18125 (I hope you finance less) your payment will be approx $460.16 at 17.99% for 5 years.  At the end of one year, you would have paid down $2245 in principal if all the payments are made on time, not one day late.  If you choose the 72-month loan your payment will be $413.29 per month and at the end of the year, you would have paid down about $1846 in principal and the rest of the payments go to interest. Depending on the lender you may be able to make lump sum payments to reduce the principal. If not, you can save up the funds to have extra funds available to you when you refi. 

 

Did you shop your rate?  If you were able to get a much better rate, even with your bk, you would save thousands. Is this 17.99% rate the one the dealer quoted?  It doesn't sound like a good deal to me at all - and I have been in your shoes. I just kept negotiating until I got the rate down to 7.14%, recognizing that I had to pay a 'penalty' for the first vehicle loan after Bk.  But the dealer started off with a ridiculous rate too.  They always do.   Even the price of the vehicle is high from a quick search.

Message 4 of 17
azguy13
Senior Contributor

Re: Terms post bk


@SSH0126 wrote:

Right so in doing so that would not necessarily make me upside when I go to refi correct? because they are only refi the principal amt and the principal and interest is that correct? 

 

It's Honda finance or American Honda so I am going to get it tmrw but I for sure need to find out what there criteria is for making principal only payments..

 

Not sure if they are requiring gap just yet..

 

 

 

 


At 17.99% you will be paying $3,260 in interest that first year. The car depreciates at the same rate no matter how many months the loan is financed for. You will need a decent down payment to ensure you are not upside down at the time of refi, unless you can put money down during the refi. 

Message 5 of 17
SSH0126
Established Contributor

Re: auto loan terms


@StartingOver10 wrote:

@SSH0126 wrote:

We were approved for a honda accord (2015) at 17.99%

 

 we are fresh out of bk and will be financing 

 

cost of vehicle is $18,125 with 19,672 Miles

 

my question though is does it make a difference when selecting a 60 or 72 yr term..we are wanting to refi no later than 1 yr from now? 

 

want to make sure than we will not be upside down then.


^^If you don't want to be upside down in 12 months, then put down as much as you can and make it a shorter term rather than a longer term - especially with this awful rate you are getting. The longer the term, the more interest you pay and the less principal you pay.  As an example ,if you are financing $18125 (I hope you finance less) your payment will be approx $460.16 at 17.99% for 5 years.  At the end of one year, you would have paid down $2245 in principal if all the payments are made on time, not one day late.  If you choose the 72-month loan your payment will be $413.29 per month and at the end of the year, you would have paid down about $1846 in principal and the rest of the payments go to interest. Depending on the lender you may be able to make lump sum payments to reduce the principal. If not, you can save up the funds to have extra funds available to you when you refi. 

 

Did you shop your rate?  If you were able to get a much better rate, even with your bk, you would save thousands. Is this 17.99% rate the one the dealer quoted?  It doesn't sound like a good deal to me at all - and I have been in your shoes. I just kept negotiating until I got the rate down to 7.14%, recognizing that I had to pay a 'penalty' for the first vehicle loan after Bk.  But the dealer started off with a ridiculous rate too.  They always do. 


Yes and this is the ***only approval** we were able to get. There is no way we would only pay  the min each month. yes, it is a sour deal..however we are not one of those stories that come right of bk getting approved for everything under the sun with better terms...how can you negotiate your interest rate when they know that you have not been able to get anyone to finance you?? please share lol. that is why I was just focusing on making sure we have no lates and everything is in order and attempt to refi with a credit union 6-9 mos or 1 yr 

Message 6 of 17
SSH0126
Established Contributor

Re: Terms post bk

Undestood but that is ***if you only pay the min payment**** we are not going to do that...we want to pay extra toward the principal and make lump sum payments toward the principal only...so if we do that what is the difference between a huge down payment now and making a lump sum payment here shortly towards the principal only??

Message 7 of 17
SSH0126
Established Contributor

Re: Terms post bk

yes perferrably on this bk board

Message 8 of 17
StartingOver10
Moderator Emerita

Re: auto loan terms

My secret???

 

I just kept saying no.  And I got up and walked out of the finance office.  He came running after me and we were able to get down to the real numbers. I was negotiating at a regular dealership at the time (Toyota, not a subprime dealer)  and wasn't going to accept a bad deal.  I also put down funds and didn't try the 'zero down' bit because that isn't going to work when you have a newly discharged bk. 

Message 9 of 17
SSH0126
Established Contributor

Re: auto loan terms

Yeah we are not in a position to string this out..We are going to call him now and tell him we need him to get the interest rate lower..not sure that will just work...

Message 10 of 17
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