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SethNizami

Help Refinance Car Loan: Low Credit & 120-130% LTV

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Hey guys :)

 

I'm truly doing my best to help a friend who is victim to a 25.5% interest rate on their car loan!

 

Currently the details are:

 

Vehicle Value: Roughly 11.5k on NADA books

Current Pay-Off: 15.5k

DTI: Less than 10%

Credit Score: 600

 

I'm having trouble locating a FCU or similar that will give a 120-130% LTV and also approve based on the credit score. The income is great of course.

 

Any suggestions on which FCU will approve the refinance? We have the ability to pay off some of the currently owed on the vehicle to bring it into approval.

 

Thanks so much! :)

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Typically a credit union will use NADA retail to calculate their advance parameters.  Higher scores get higher advances.

 

HTH

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11 hours ago, SethNizami said:

I'm having trouble locating a FCU or similar that will give a 120-130% LTV and also approve based on the credit score. The income is great of course.

Great income and low DTI should make it easy to solve the LTV problem. 

 

Just have your friend make an extra payment in the amount required to lower LTV to the necessary threshold in order to get favorable refi terms.

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Try Capital One, they do very high LTV's on refi and with a 600 score my guess rate would around 8-9%. I refinanced my 2018 Corolla LE in Feb 19 owing 21.5k from 14.4% to 9.86 under my wife and her score was 527 at the time. Only a soft pull to check as well then a hard pull to finalize offer. I found that most credit unions rates were higher until scores are over 620.

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The other option is to prepay the principal down to get the LTV below 100% or even lower.  If you can refinance to get a better rate before that is needed then buy all means do it as 25.5% is something you want to get out of.

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