Hello everyone I have a problem. My wife and I declared the big B about 3 yrs. ago, so like anybody wanting restablish our credit we went and bought a car at a high interest rate(I know we aren't the first to do this). Needless to say we are trying to get out of this car and the blue book value isn't even close to what we owe. so could anyone provide us with some suggestions? Thanks stmj
with refinance they will probably give you a horrible rate (due to BK), and will not refinance the total balance, buts it possible. You'll probably have to come up with the negative equity value (and then some).. I've yet to see many people with bad credit refinance here. Alot of people talk about it, but i've yet to see many say "I've got bad credit, refinanced my horrible 20% loan to 10%"... It's easier to get into a new car at a lower rate, which accomplishes two things at once
stmj, I like the refi option the best. Do you have any relatives (it usually doesn't matter how distant) that belong to a credit union? You need to join one and open up a small account there. A month or two later go in and ask one of the loan officers for help. They usually will give you a chance to prove that you will be a good customer. Most of the time they will charge 10-14%. That way you can pay down the principal quicker and eventually get even. Most Credit U's don't base the rates only on scores. You said you wanted to "get out", Why? For a newer /different model? Or just because of the heavy interest? What is the interest rate? If you can be more specific maybe we can give you more help. If you can find a CU that goes by retail Kelley book they will finance a high amount. Boeing CU is one that will finance a bunch. Kelley book is usually 2-3K high.
I did it with Generations Bank after three years being upside down by about $1400. They took me from 17.25% to 7.9%. Generations Bank financed the whole deal, including negative equity. But, in fairness to what Sam is saying, my bad credit *had* been cleaned prior to them refinancing. They pulled TU which had only two 30 day lates at the time (it used to have 4 CO,1 collection, 7 defaulted student loans). You may want to give Generations a call, though, and speak with a credit analyst if you feel that you can explain the BK or have ggod reasons why the BK happened. The three year pay history is good and may go a long way in helpng you. It also helps if your car holds its value well, and has a dealership resale value that is *higher* than what you owe. For me, they determined equity based on the dealership resale value and not the Kelly Blue Book true equity. That move saved me from a neg. equity downpayment. Generations will do a 7.9% 24 month refi and an 8.9% 36 month refi. In the meantime, I would get credit cards and build a good pay history with them. Now this is true, but the problem is that the bank will simply roll the negative equity of the old car into that of the new car (so now you have TWO negative equities in one loan). If he chose to get a new car, he should get one that really holds its value and make 2X the minimum payments on the car note. But, if the interest rate on the new car is low enough, over time he may be able to get out from under.
