Is it harder to refinance an existing loan?

[RGB]

Is it harder to get a car refinanced, than original financing?

 

I am paying a nasty interest rate from a loan on a car I got a year ago, when my scores were in the middle 500s. My scores are now in the middle 600s, and I can't get anyone to refi for me. Don't know why - I have no late payments, and my car payments are always on time. Nothing late on me with the 3 CRAs (I'm a daily puller) yet I can't get anyone to refi for me.

 

I'm afraid to go to any other lenders because I went through USAA first and they declined me, and then they herded me to a secondary lender who allegedly specialized less than perfect credit, and they turned me down, too.

 

I'm afraid to go anywhere else, because thanks to USAA and carfinance.com, I have taken 2 hard hits.

 

Thanks in advance.

[MarvBear]

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[MarvBear]

There are a number of factors involved, at least two of which, being your overall credit profile, and the LTV required to refinance your present loan.

[RGB]

There are a number of factors involved, at least two of which, being your overall credit profile, and the LTV required to refinance your present loan.

 

I see. So it might not necessarily be so much my credit, as the fact that the car is worth less than is owed?

[road2freedom]

When you are declined, you should receive a letter giving the reasons for denial. If it's a LTV issue they would likely tell you before you apply. Are you a member of any credit unions? You may have better luck with them.

 

That said...

 

-Get the letter and figure out exactly why you were declined.

 

-Figure out your LTV using various sources (Black Book, Edmunds TMV, NADA, etc). If you are >100% it's very unlikely you will get someone to refi you at a better rate. 80%-100% should be a little easier. If you can pay down the balance a bit to get you into the appropriate LTV, do so.

 

-Check your credit unions for requirements. Ask questions (LTV, requirement, etc) before you apply.

 

If you can join NFCU they will refi 100% of NADA clean retail, have decent rates, and will lend to those with less than stellar credit once you show 6 months of repayment history on your current loan.

[RGB]

When you are declined, you should receive a letter giving the reasons for denial. If it's a LTV issue they would likely tell you before you apply. Are you a member of any credit unions? You may have better luck with them.

 

That said...

 

-Get the letter and figure out exactly why you were declined.

 

-Figure out your LTV using various sources (Black Book, Edmunds TMV, NADA, etc). If you are >100% it's very unlikely you will get someone to refi you at a better rate. 80%-100% should be a little easier. If you can pay down the balance a bit to get you into the appropriate LTV, do so.

 

-Check your credit unions for requirements. Ask questions (LTV, requirement, etc) before you apply.

 

If you can join NFCU they will refi 100% of NADA clean retail, have decent rates, and will lend to those with less than stellar credit once you show 6 months of repayment history on your current loan.

 

Thanks. I have been a member of Navy Fed for about a year and a half, but didn't even apply with them because they were such douches when we applied for a mortgage with them. The clerk actually lied to us about certain things, etc, which floored us because this is Navy Fed, you know? But I've been a little gunshy with them because of that. My payment history is pristine for the last year with this loan, though. Ever since I got the car, I've not paid late once.

 

Thanks for the info, though. I'll wait on the letters and go from there.

[road2freedom]

I could understand that. I have a hard time doing business with a company if they've screwed me (or blatantly tried) in the past. I've never had a bad experience with them so far though as many other CB'ers will attest the same thing. You might have just gotten a bad egg. With all the positive feedback on this site about the, I'd definitely consider giving them another shot... especially since it could save you a few thousand dollars. Good luck!

[MarvBear]

Is it harder to get a car refinanced, than original financing?

 

I am paying a nasty interest rate from a loan on a car I got a year ago, when my scores were in the middle 500s. My scores are now in the middle 600s, and I can't get anyone to refi for me. Don't know why - I have no late payments, and my car payments are always on time. Nothing late on me with the 3 CRAs (I'm a daily puller) yet I can't get anyone to refi for me.

 

I'm afraid to go to any other lenders because I went through USAA first and they declined me, and then they herded me to a secondary lender who allegedly specialized less than perfect credit, and they turned me down, too.

 

I'm afraid to go anywhere else, because thanks to USAA and carfinance.com, I have taken 2 hard hits.

 

Thanks in advance.

 

 

Is your credit absolutely pristine? Is your credit file sufficiently historical in that it would show 7+ years of continuous and impeccable payment history on all your reported obligations, at least equal to the amount of money you wish to borrow?

 

If that is the case, then you are more likely to get a higher LTV, but not necessarily a substantially better apr.

 

Most lenders price their loans based on a combination of the LTV and your overall credit profile, which, to a certain extent is demonstrated by your current FICO score.

[RGB]

No, I wouldn't say that it's pristine . I have 2 paid collections from a while back that the OC refused to remove. They won't fall off for a couple more years. As far as late pays, I have none. My oldest credit card is 5 years old, and I've never paid it late. My others are all a couple of years old, and I've never paid them late, either. I got the cards to build my credit so we could buy a house. I've got a couple of furniture loans that I got to build my credit, and they are about a year old, and I've never paid them late. I don't have my FICO, but my FAKO is 663 on all 3.

[MarvBear]

                           INSTANT MERGE SUMMARY
                           ---------------------
ACCOUNT DISTRIBUTION                               CURRENT STATUS(tradelines)
Account Type      Count       Balance      Payments Curr Clsd Unrt 30  60  90+
 Real Estate        5             $0            $0  -    5     -   -   -   -
 Installment        4           $427          $806  2    2     -   -   -   -
 Revolving         14         $1,174           $43  8    6     -   -   -   -
 Other              0             $0            $0  -    -     -   -   -   -
 Total             23         $1,601          $849 10   13     -   -   -   -

INQUIRIES                  PUBLIC RECORDS   HISTORICAL DELINQUENCIES(count)
 6 Month Total      1        EFX     N/A   Account Type  LastDlq  30  60  90+
 Elim. same day  -  0        XPN     N/A     Real Estate           -   -   -
 Adjusted Total     1        TUC     N/A     Installment           -   -   -
 New Trades(6 mon)  0        Last 2yrs N     Revolving             -   -   -
                                             Other                 -   -   -
 Oldest Trd: 05/97        On File: 05/97     Total                 -   -   -
------------------------------------------------------------------------------
Only Applicant/Co-applicant information included in the Summary.


                          BUREAU SCORE INFORMATION
                          ------------------------
EFX BEACON 5.0 Auto            (APP)=   831 Factor: 00030, 00008, 00005, 00014
 00030 TIME SINCE MOST RECENT ACCOUNT OPENING IS TOO SHORT
 00008 TOO MANY INQUIRIES LAST 12 MONTHS
 00005 TOO MANY ACCOUNTS WITH BALANCES
 00014 LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED

 

=pristine