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sharkey93

Refinance now or keep building score?

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Posted (edited)

I have 16k in auto loan debt at an insane 17% which currently comes out to about 8k in interest over the life time of the loan. My score is currently at a 662 (It was probably around 570 when I got the loan). I've started to consider shopping around to refinance but my question is would it be worth waiting a bit longer for my score to go up a bit more? Would I see any significant difference between say 662 and 670. I'd anticipate I should be able to boost it a bit more once some collections I'm working on fall off but at the same time I'm practically xxxxxxxxxx away money on this loan each month so if I'm not going to see a huge difference I'll just start shopping around.

Edited by MarvBear

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Posted (edited)

Provided you aren't upside down at any given time and you have sufficient balance remaining there is no reason you cannot refinance more than once.

 

I would shop around a bit and see what you can get with your current scores.  If you can cut that rate by 1/3 or 1/2 it would be worth your time. 

 

People here seem to love DCU for their auto rates with challenged credit circumstances, if you are looking for an idea for a place to start.

 

Good luck.

 

 

Edited by cv91915

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Beyond the guidance about the wisdom of doing the re-fi on the note, I hope you are also tossing as much as possible at the balance to get it paid down ASAP.  The APR sucks and just making minimum payments does you no favor...

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6 hours ago, centex said:

Beyond the guidance about the wisdom of doing the re-fi on the note, I hope you are also tossing as much as possible at the balance to get it paid down ASAP.  The APR sucks and just making minimum payments does you no favor...

 

I'm about a year and a half in and have not however going into this new year it is definitely my plan to start paying it down as aggressively as possible and get it off my back.

 

 

On the note of refinancing I applied for a refi at DCU as @cv91915 suggested and was approved for 12%. It's not great, or even good but it's certainly a start. I'll keep shopping around and see if I can beat that. However after looking at my cars current value I AM upside down on it about a grand so I'm not holding my breath for anything much better.

Edited by sharkey93

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I got another approval at 10.89% I think I will accept. They are trying to push GAP insurance and I wanted to run it buy you guys if it makes sense. 

 

Going by NADA Average trade in it's valued at 15k and 18k at the highend of "Clean Retail". I still owe 16k so lets say I'm upside down 1k if we go by the low end. I plan on making principle payments of at least $1,000 effective next month. Am I correct in my thinking that GAP would be a waste of money?

Edited by sharkey93

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18 minutes ago, sharkey93 said:

I got another approval at 10.89% I think I will accept. They are trying to push GAP insurance and I wanted to run it buy you guys if it makes sense. 

 

Going by NADA Average trade in it's valued at 15k and 18k at the highend of "Clean Retail". I still owe 16k so lets say I'm upside down 1k if we go by the low end. I plan on making principle payments of at least $1,000 effective next month. Am I correct in my thinking that GAP would be a waste of money?

How much is the coverage?  

 

Your exposure Is pretty small.  The cost for the coverage would have to be almost zero in order make it worthwhile.  

 

If the cost is hundreds of dollars you're probably better off throwing that amount at the loan balance.  Or are they trying to get you to finance the GAP?

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30 minutes ago, cv91915 said:

How much is the coverage?  

 

Your exposure Is pretty small.  The cost for the coverage would have to be almost zero in order make it worthwhile.  

 

If the cost is hundreds of dollars you're probably better off throwing that amount at the loan balance.  Or are they trying to get you to finance the GAP?

They are trying to bundle it in and finance it. Cost is $795. It seems like I would have to have the absolute worst case scenario to see any benefit from it. (Totaling the car within the next 90 days)

Edited by sharkey93

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52 minutes ago, sharkey93 said:

They are trying to bundle it in and finance it. Cost is $795. It seems like I would have to have the absolute worst case scenario to see any benefit from it. (Totaling the car within the next 90 days)

Sounds like a lot of money to insure a relatively small risk.  I would pass.  

 

If they start saying things like "It's only $X per month for peace of mind," I would throw a bucket of acid in someone's face.  :) 

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Concur with cv that GAP is NOT worth it in this instance. 

 

By paying more than the minimum each month, you won't be upside down down for long, and when you owe less than book, you would have ZERO benefit to have gained in the event of a total loss.  They are pushing it because it is pure profit for them...they have no downside here.

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Really appreciate the insight. You all on this forum are great. After more consideration I think I'm going to go with DCU. They are a point higher than my lowest current offer but the difference is negligible even over the lifetime of the loan let alone if I'm making large principle payments. I got a much better vibe from them than I did from the other credit unions, the one point won't benefit me much if it's a nightmare to deal with that CU.

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37 minutes ago, sharkey93 said:

Really appreciate the insight. You all on this forum are great. After more consideration I think I'm going to go with DCU. They are a point higher than my lowest current offer but the difference is negligible even over the lifetime of the loan let alone if I'm making large principle payments. I got a much better vibe from them than I did from the other credit unions, the one point won't benefit me much if it's a nightmare to deal with that CU.

Great to see you realizing some immediate interest savings, and I'm genuinely relieved that you won't be wasting your savings on overpriced insurance coverage you do not need.  

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