refinanced a car loan

Discussion in 'Credit Talk' started by rhondak, Aug 27, 2003.

  1. rhondak

    rhondak Well-Known Member

    I'm new and apologize in advance if this is a stupid question.

    I'm cleaning up my fiance's credit, not mine. He recently went through a divorce and we're trying to get payments down

    One thing he had is a car loan that actually shows perfect pay history which is a good thing but it was a ridiculous interest rate - over 20%. We were able to get the original loan company to refinance it at 17% (still a crappy rate, but better than 20% and couldn't get any other company to refinance it at any rate)

    The original loan was from 1999. The loan company is actually going to close this original loan, show it paid off, then open another new loan for the refinanced loan. (oh, and there is another previous paid off, paid as agreed with this same company on a different car)

    Will this payoff be beneficial even though they will be opening a new loan? Or will the new loan offset any benefit?

  2. SoParkDiva

    SoParkDiva Well-Known Member

    Don't do it. What are his scores and why won't any other lender touch him if his payment history is good? He can get a better rate than 17%. That is still considered subprime and if his scores are good you should keep searching for a better deal. try or

    My banker gave me 13% refinancing rate but I declined. I am not interested in refinancing now because the car is almost paid off and I don't want them to rewrite the contract and add more time to it.
  3. rhondak

    rhondak Well-Known Member

    Roadloans turned us down. We tried that. I have the letter right here - says "insufficient credit". and it says the info is from Equifax. Equifax only has a few negative items on it, all old (over 3 years)

    I think it might have to do with his student loans. They are all "paid or paying as agreed" but there are $40K worth.

    I really was hoping we could get that car loan refinanced for closer to 10 or 12%. He's "upside down" on the damn thing already.

    We have very few monthly payments, that car pymt is one and our land payment is the other, and we're renting right now, hope to build on our land soon.
  4. rhondak

    rhondak Well-Known Member

    Oh, forgot - the scores...

    I don't know. I did the free score thing at and it said 563 but I'm not sure what CRA that comes from and have no idea what his score is at the other CRAs.

    What is a good place to get those scores and how much do you have to pay to have access to them?

  5. SoParkDiva

    SoParkDiva Well-Known Member

    Click here for info on how to get all 3 scores for $29.97
  6. chipper

    chipper Well-Known Member

    How many payments do you have left on the original loan? And how many months would the new contract be structured for?
  7. rhondak

    rhondak Well-Known Member

    It was originally a 6 year loan, still 4 years to go. The new loan did make it 5 rather than 4 years to get the payment down.

    I'm still hoping to make extra principle payments to get it paid off sooner, but we had to get payments down as much as possible.

    With his divorce and having to pay child support now, we just had to get monthly payments down.

    I'm hoping that with the credit repair efforts, I can get it refinanced at a lower rate.

    We even thought about trading it in for a cheaper vehicle, but because he's already upside down on the loan, there isn't anybody that would pay off the old loan on a trade-in.

    He still owes about $11K and I think the trade in value right now is around $4K.

    He actually has had quite a few late payments on it, but luckily, the loan company has always reported him as a perfect payor. But those extra charges have really kept him from paying as much on the principle as what he should have.

    It really sucks because the original loan was $12,950 and after 2.5 years of paying, he's only down to $11K principle.

    This is one of those nightmare loans that I really need to get paid off as quickly as possible, but at the same time, I need to get the monthly payment down as low as possible for those bad months.

    Old payment was $317 and new payment is $278.
  8. chipper

    chipper Well-Known Member

    Re: Re: refinanced a car loan

    Its hard to work it from both ends. It sounds like the monthly payment is beneficial to you at this point, so at least you have a lower payment.

    Loan companies can be funny, so make sure when you overpay that you stipulate that the money is to go directly towards the principal. Also, it is good to ask if there are any pre-payment penalties. Usually you don't have to worry, but loan companies do funny things and it's good to have your bases covered.

    Good luck with your credit repair!
  9. rhondak

    rhondak Well-Known Member

    Re: Re: refinanced a car loan

    Thanks, Chipper

    Just enrolled my daughter in college today. Holy Cow! I have to go get a damn title loan just to get her books! The financial aid should come in 3 weeks. The state is paying her tuition, thankfully. Hoping she'll qualify for pell grant to pay back on the books.

    Yeah, we have to get the required payments down. I'm not working now (used to make around $100K/yr and I'm adjusting - but not very well)

    Really, my fiance doesn't have many derogs, and we don't have a lot in monthly payments, other than that car and the land, his child support and our rent. If we can get our house built, our mortgage will be less than we're paying for rent and storage combined. Plus, we want to take advantage of the low interest rates, of course.

    Personally, I think he's been screwed on this car loan from the beginning. His original interest rate was 20.99. He's been paying on it for around 3 years and has barely made a dent in the principle. Of course, now the vehicle isn't worth half what he owes on it, so refinancing is very difficult.

    Our land is at 8% but it was an owner finance (no credit check, no debt showing anywhere)

    He has $40K in student loans, never late, currently on forebearance which means we don't have to pay for a year, but interest accrues during the forebearance period (to the tune of $2K)

    I really need to go back to work for about a year to pay off the debts, but he (nor I) want me to travel anymore (I was on the road 5 days a week when I was working). I've been trying to find something that pays less, but still enough to make it worth working to pay off those debts (land and car and start on the student loans)

    He has 4 derogs each on TU and EQ, but EXP (ARGH!) still has 10 derogs - most of them old (over 3 years) and most under $100. My first round of disputes got almost everything off TU and EQ.
  10. rhondak

    rhondak Well-Known Member

    Re: Re: refinanced a car loan

    Oh yeah, about the "apply to principle" thing. I'm really really aware of that.

    Funny story. My dad used to pay extra principle on his house, and also would pay a little earlier each month until he got to the point where he was a full month ahead. Then he got a late notice from the bank. He told them, no, I'm a month ahead, not late. They argued. He took his amortization schedule and his entire payment history from the beginning to the bank and argued with them for about 2 hours, had to managers involved, etc., before they finally got it.

    The following month, they credited him an extra payment (that he hadn't made). Being the good person he was, he tried to call them and tell them they credited him with an extra payment. Ran into the same stupidity and finally gave up.

    He ALWAYS wrote two separate checks - one for the regular payment and one for the extra principle. The man was absolutely ANAL when it came to record keeping.

    After he died and we had to go to his workplace to get his tools and stuff, I found a huge stack of records of his overtime and when his paychecks weren't right (double overtime on Sundays and holidays, all kinds of weird overtime rules where he was working) and almost every paycheck was wrong. He argued for and got every single penny that was owed to him.

    Personally, I don't even know how he kept track of all the overtime and the errors on his paycheck. Like, if a holiday fell on a Sunday, he got something like triple pay....I don't even know. But his records were something to absolutely marvel over.

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