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auto refinancing. suggestions please!!


Lema
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The last post in this topic was posted 1020 days ago. 

 

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Last year me and my wife took out a car loan together. Since our credit was "new" it was low enough to get us a 24%¬† interest rateūüė¨¬†on a used 2010 buick lacrosse..¬†but we were¬† in¬†need of¬† a vehicle and didn't know we could still shop around and have minimal inquiry impact on our credit. Now we are looking to refinance both of our credit scores are in very good shape 740s across all 3 bureaus and no negative marks. On her report she only has the auto loan along with a secured cc , on mine i have the auto loan along with a personal loan. So i would like to know,Would it be better if she applies for the refinancing on her own? or would the both of us need to do it since we are both on the original loan?¬†and if we/she has no luck with our bank are there any reputable online lenders that anyone here in the community has dealt with in the past?

  The loan is through American Credit Acceptance and they do not refinance..... 

Also in what way would it impact my fico is she were to obtain the loan? would the previous loan erase from my report and only report on hers after the refinancing?

 

thank you all for our help i feel like my questions are all over the place... if you need any more info to help with answering these questions please feel free to ask

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2 hours ago, Lema said:

both of our credit scores are in very good shape 740s across all 3 bureaus and no negative marks

You are easily score-ready to refinance... but there are some other considerations:

 

2 hours ago, Lema said:

2010 buick lacrosse

How much do you need to borrow, and what is the approximate LTV of the new loan (LTV = new loan amount divided by the current value of the vehicle).  If you are significantly underwater, this will be a major obstacle. 

 

The age of the collateral may also prevent you from getting the very best rate, but with the rate you currently have it would be almost impossible not to get a significant improvement (assuming LTV isn't crazy).

 

Note:  You can get the LTV down by kicking some cash into the deal - you will just have to borrow less than your current loan balance. 

 

2 hours ago, Lema said:

So i would like to know,Would it be better if she applies for the refinancing on her own? 

You may get better rates if you have two borrowers with prime credit vs. just one on the application (this was our experience with Bank of America - rate dropped another ~0.25% with both of us and our 800+ scores, vs. just me).  Wherever you apply, at least ask the question.

 

2 hours ago, Lema said:

would the both of us need to do it since we are both on the original loan?

Not a requirement, but see above.

 

2 hours ago, Lema said:

Also in what way would it impact my fico is she were to obtain the loan? would the previous loan erase from my report and only report on hers after the refinancing?

The old auto loan will report as closed on both of your reports.  Do either/both of you have other OPEN installment loans reporting?  

 

 

Edited by cv91915
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2 hours ago, cv91915 said:

You are easily score-ready to refinance... but there are some other considerations:

 

How much do you need to borrow, and what is the approximate LTV of the new loan (LTV = new loan amount divided by the current value of the vehicle).  If you are significantly underwater, this will be a major obstacle. 

 

The age of the collateral may also prevent you from getting the very best rate, but with the rate you currently have it would be almost impossible not to get a significant improvement (assuming LTV isn't crazy).

 

Note:  You can get the LTV down by kicking some cash into the deal - you will just have to borrow less than your current loan balance. 

 

You may get better rates if you have two borrowers with prime credit vs. just one on the application (this was our experience with Bank of America - rate dropped another ~0.25% with both of us and our 800+ scores, vs. just me).  Wherever you apply, at least ask the question.

 

Not a requirement, but see above.

 

The old auto loan will report as closed on both of your reports.  Do either/both of you have other OPEN installment loans reporting?  

 

 

 

2 hours ago, cv91915 said:

You are easily score-ready to refinance... but there are some other considerations:

 

How much do you need to borrow, and what is the approximate LTV of the new loan (LTV = new loan amount divided by the current value of the vehicle).  If you are significantly underwater, this will be a major obstacle. 

 

The age of the collateral may also prevent you from getting the very best rate, but with the rate you currently have it would be almost impossible not to get a significant improvement (assuming LTV isn't crazy).

 

Note:  You can get the LTV down by kicking some cash into the deal - you will just have to borrow less than your current loan balance. 

 

You may get better rates if you have two borrowers with prime credit vs. just one on the application (this was our experience with Bank of America - rate dropped another ~0.25% with both of us and our 800+ scores, vs. just me).  Wherever you apply, at least ask the question.

 

Not a requirement, but see above.

 

The old auto loan will report as closed on both of your reports.  Do either/both of you have other OPEN installment loans reporting?  

 

 

so as for the LTV.. i ran the numbers and i got 2.14  ??  i would need a 12,000 loan for the car, the cars value right now is 5,600... yeah im drowning in this thing....

 

as for the installment loan only i have the other installment loan reporting

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1 hour ago, Lema said:

 

so as for the LTV.. i ran the numbers and i got 2.14  ??  i would need a 12,000 loan for the car, the cars value right now is 5,600... yeah im drowning in this thing....

 

as for the installment loan only i have the other installment loan reporting

LTV of 120% is probably already pushing it.  214 isn't realistic.

 

There are alternative ways of doing this.  

 

Perhaps you could get a 0% BT credit card that would allow you to shift your current $12k auto loan balance to no interest for 12-21 months, and then keep making the payments in the amount you're making now (or ideally, even more).  

 

That would put a big dent in the balance, and you could re-evaluate your options as you got toward the end of the 0% BT period.

 

You might also be able to get a personal loan from LendingClub/Prosper for the negative equity and refinance the balance into a new car loan with a rate in the low single digits.  Make sure you take any origination fees on the personal loan into consideration to make sure it's still worthwhile.  

 

Having at least one open installment loan each of your reports will help your FICOs, but honestly, your credit is solid and the only thing that's really important is addressing the 24% interest rate on your current note.

 

 

 

 

Edited by cv91915
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53 minutes ago, cv91915 said:

LTV of 120% is probably already pushing it.  214 isn't realistic.

 

There are alternative ways of doing this.  

 

Perhaps you could get a 0% BT credit card that would allow you to shift your current $12k auto loan balance to no interest for 12-21 months, and then keep making the payments in the amount you're making now (or ideally, even more).  

 

 

 

Thanks for your help i will definitely explore these options..

 

 

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On 4/12/2020 at 1:37 AM, cv91915 said:

LTV of 120% is probably already pushing it.  214 isn't 

 

 

 

 

By any chance have you heard of credit9?.. while i was researching BT cards i received a pre-approved offer in the mail for my debt amount with 0 interest for 12mos ... its a consolidation line of credit is what it says.. thanks 

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48 minutes ago, Lema said:

By any chance have you heard of credit9?.. while i was researching BT cards i received a pre-approved offer in the mail for my debt amount with 0 interest for 12mos ... its a consolidation line of credit is what it says.. thanks 

IIRC that is Americorfunding which is known for using those mailers for lead generating debt "relief" products and few people qualify for the 0%.

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