When to refiance new vehicle

[DLJ]

Hi I am new here, I was recomended here by a co-worker. I have a question I have a 491 score and just bought a new vehicle. When should I start to refinance. I am at 15.9% intrest. I only have some late pays and two charge off's on my account right now and I will be taking care of those by the end of the summer at the latest. The note is not really high considering what I make per month but I don't want to give them anymore than I have to during the course of the loan. Any ideas, suggestions on how long to wait and who should I re finance with?

 

Thank you

[gamecockcountry]

That probably isn't a horrible rate considering the score. I would probably work on getting your score up and getting those charge off's taken care of. I'd go over to the credit forum and get some help getting that cleaned up.

 

While you are working on cleaning that up pay extra on your car payments if you can. Verify how your lender handles extra payments so that you can make sure all extra money paid goes to principal.

 

Did you put money down on the new car? At 15.9% it is going to be pretty easy to get upside down on it. The extra payments will help bring down the balance which will be important for refinancing.

 

You can always go into your bank/ credit union and just have a conversation with a loan officer. See what their requirements are for approval. I know my credit union is very helpful and has no problem talking to members about scenarios like this.

[MarvBear]

Time, demonstrates ability to pay, stability, and willingness to pay, all 3 very important in analyzing a loan application.

[DLJ]

Ok thanks all for the positive responses. I am already working on getting the few bad things off my report now so hopefully by the end of the year they might be gone so I can st out from this high rate in about a year. I have really learned my lesson with credit.

[RBinAK]

DLJ: I was in the same boat as you and I additionally had zero revolving trade lines. What I found is that by having no credit cards I had nothing to counter balance the negatives. I went up 60 points on all reports simply by adding a $700 secured credit card from my credit union for 6 months.

 

If you are interested you could post a new thread in the main credit forum with a breakdown of your situation and the people on here can provide great feedback for early steps.

[DLJ]

Thanks all for the advice. @gamecockcountry, I did not put any money down. I like the idea of paying a little more each month to either end the loan early or help with the refinance of it. When I send in the extra payment how do I make sure that the finance company applies it to the principal? @RBinAK I have been reading on the other sections here and I am going to start to work on some things next month. Thank you MarvBear that is why I am setting up auto pay

[MarvBear]

 

Thanks all for the advice. @gamecockcountry, I did not put any money down. I like the idea of paying a little more each month to either end the loan early or help with the refinance of it. When I send in the extra payment how do I make sure that the finance company applies it to the principal? @RBinAK I have been reading on the other sections here and I am going to start to work on some things next month. Thank you MarvBear that is why I am setting up auto pay

Contact the lender for their preferred method of handling principal payments.