Refinancing Car

Refinancing Car questions and answers

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Q: refinancing car?
my husband and i just got married, we would like to refinance our car to get a better rate. before he got rejected for refinancing because he didn't make enough money a month and could not claim my income since we were not married yet. now that we are married we should make enough together a month. i have one bad mark on my credit which is an old phone bill i never paid, other than that i have NO credit. so my question is if i pay that phone bill and have no credit bad or good can we still get a better rate with me having no credit?

A: Hello, Because you got 1 bad mark on your credit history, you will probably still get credit. However, you will not find it as easy to get credit as someone who didn't have that bad mark; and you will pay a higher interest rate. This is because you proved that perhaps you aren't 100% trustworthy in repaying the debt. Now, the telephone company has probably written off the debt; if you contact them to pay the bill it won't affect your credit rating; they will just be getting the money you owe them. The only way to improve your credit rating is to get credit and repay it on time and in full. You should just try to get the car refinanced now you are married and hope that they give you a chance to redeem yourself. Just make sure that you have enough money to afford the repayments, or you will be making your credit history even worse. Thanks

Q: Refinancing car?
I am looking to refinance my car and wanted to know if I apply to multiple companies looking for the best interest does it count as one inquiry (like when you're looking to buy a car multiple inquires in a 14 day period= ONE inquiry) on my credit report or does count as multiple inquires?

A: i wouldn't listen to much to spiff man, if you look into refinancing you car no matter who looks, it will put an inquiry on you credit score but dont worry if you are within a few like 5 and under your credit score isnt going to change. it only changes when you start to abuse the info like trying to get a credit card then a car then a mortgage. do things one at a time and you will be fine. look into credit unions the are extremely liberal on giving loans to there customers. you only need to get an account with them and there programs are usually better than any banks anyway i.e. free checking no min. in your account etc. and they will actually have you talk to the loan processor to explain any derogatory you credit has. the are real people like you and me. hope that helps. good luck.

Q: Refinancing Car???
I am looking to refinance my car next month (I would have had my car a year Aug 17) I have made my payments on time with the exception of one (it was 2 days late to the company, and before the grace period of 10 days ended) What are my chances of getting a better rate (current rate 16%) and with my credit score being 585? Also does anyone with low credit score and have a car loan thru a credit union let me know your experience. I would really like my credit union to refinance but I'm not too confidant My current loan is with HSBC Auto Finance

A: Auto finance is what I do for a living and it will depend on how much you owe verse what the car books for now. With your score H.S.B.C. would have carried 115% of trade value, a year later depending on how long you financed for, you could be looking at refinanceing 125% to 135% of trade value. Your own credit union would be the place I would start, they normally go off of retail and this would reduce your carry. If this doe's not work try Wells Fargo and Citifinancial Auto, they both will do large carrys. Actually, 16% for a 585 score is not all that bad.

Q: Solve an argument - refinancing car loan AFTER making really large payment?
If you're planning to refinance your car loan in a few months (at a MUCH lower interest rate) what is the logic in paying a large chunk of money NOW to the company that holds the high-interest loan at the moment? Seriously, I'm missing the logic here. Wouldn't it be smarter, if you have a chunk of money (which is equal to three high-interest rate car loan payments) why wouldn't you just make your normal payment for the next few months, refinance at the lower rate and THEN pay the big chunk of money?

A: Modern car loans from reputable financial institutions should be made with simple interest - you pay a portion of your payment is interest and a portion is principal each month. That being said, EVERY DAY THAT YOU HAVE MONEY BORROWED AT A HIGHER INTEREST RATE, IT IS COSTING YOU MORE INTEREST. Make the large payment on the higher interest loan now and next month you will be paying more toward principal, and the month after that you will be paying more toward principal. Now when it's time to re-finance, you don't have to take out as large of a loan, which in most cases reduces your loan origination fees and taxes that are often charged, and you continue that smaller loan at a smaller interest rate.

Q: What are the pros and cons of refinancing a car?
I have good credit (well over 700). The resale value of my 2004 Honda Civic is well above what I owe. I'm interested in refinancing to pull some money out to pay off a credit card bill. If I do refinance, how will this look on my credit? My husband and I are also interested in purchasing a new vehicle in the next few months and refinancing our home next year. Good idea to refinance my car? Thanks very much!

A: The interest on a used car loan is significantly higher than a new car. Sounds like your at the top of a long slippery financial slope. If your in a situation that makes you consider a loan to pay off a loan (car and credit cards) you are not in a situation to consider a new vehicle in the next few months or refinancing your home next year. Calculate you total indebtedness, how you will pay it down, then think of a loan if REALLY needed.

Q: How do you go about refinancing a car?
I've had my car for 2-1/2 years, and would like to lower my payments. How do you go about it? The company that currently finances my car doesn't do refinancing.

A: Refinancing is very difficult with used cars because so often the owner is upside down in their loan. No bank is going to loan you more than the car is worth. You must have equity in the vehicle in order to refinance it. Refinancing is essentially repurchasing the car with a new loan. If your credit has improved over the last 2 1/2 years and you qualify for a lower interest rate you can lower your payment. But it takes several percentage points to make any real difference. A $10,000 loan for 4 years at 6.5% is only $11.00 difference a month than the same loan at 8.5%. Plus there will more than likely be fees the lender wil charge you for processing the refinance loan that will cost you cash out of pocket. Plus you have to consider the length of the loan. You've already had your current loan for 2.5 years and you probably still have 2.5 years to go. If you refinance and increase the length of time it takes to pay off the loan you must consider the additional interest you'll be charged for the extra payments. In the long run you may not be saving any money at all, in fact it may cost you more by the time the car is paid off. If you are struggling with your monthly bills I suggest you sit down and create a monthly budget and find a way to pay the bills and not fall behind. Write down every dollar you earn. Then write down all your expenses listing the most important ones first. (Rent, utilities, food etc...) Figure out where the money goes and you'll find a way to make this work.

Q: I need information about refinancing my car?
I am considering refinancing my car loan with a different lender. I know what my payoff amount is for the vehicle, and it adds about a $1.50 per day from today to the payoff amount. Will I have to pay taxes again for refinancing? Also should I automatically request an additional amount of about 30 days worth to cover the extra cost I may have because they may not pay off the original loan the same day.

A: when you go to the bank for the refinance they will get a current payoff and cut a check for it...and no...thee should be no fees to refinance

Q: How does refinancing a car work?
I want to refinance my car but i am unsure of how it works. I owe 16,000 on my current car. I want to trade it in for a newer car. Does the 16,000 go towards the new car, or does the trade off vaule go towards the new car. How does this work?

A: Poor girl your totally confused and what I have to share with you, will probably leave you also terribly depressed. You owe $16,000, my bet not even knowing what kind of car, the year of the car or the condition of the car - is that the car is probably worth less than you owe, lets just say its instinct. So you go to the dealership and they say they will give you $13,000 for your car as an example. This means you have negative equity in the car so now this means you will owe for your new car plus $3,000 for your old car. Where most wise people put money down so they can have positive equity and a reasonable car payment between $150 to $350 you are going to be in for negative equity which means you take your new car payment which might be like $400 and add the $3000 you owe making your total payment about $480. Your on a very bad cycle you seriously need to get off of because it can get really bad fast. What you need to do is hang on to your current car, keep paying it down, all along save up more for a good down payment and then in a year or so go for a newer car. Good Luck and seriously get off this bad roller coaster called "new car debt" ASAP.

Q: What your advice on car refinancing?
I just bought this '06 Hyundai Sonota in february. I was used though with 12,000 miles on its odometer. I ended up with a 17% interest rate. I know I'm a sucker but I kinda fell in love with the car. What's your advice on refinancing? I was considering trying Wachovia but there are no branches nearby. If it helps, I live in the Tacoma area of washington.

A: Try other local banks, credit unions, and online sources such as eLoan.com and CapitalOne.com. Unless your credit score is very low, you should be able to do much better than 17%. If you are upside down on your loan, you may have to come up with some cash to refinance. A bank or loan company won't want to lend you more than the car is actually worth.

Q: What are some FYI's to think about when refinancing a car?
I am considering refinancing my car and needed some tips/ advice on what to look for and what no to look for- what to expect etc. Do's and don'ts that sorta thing

A: DO find out how much your car is currently valued at by going to www.kbb.com or www.nadaguide.com DO find out what your current auto loan interest rate is DON'T refinance your car unless the new lender's rate is LOWER DON'T expect to get approved for the auto refinance if you owe more on it than what it is valued at Generally consumers #1 reason for refinancing their car loans is to either get a lower rate or lower payments. Do understand that typically a vehicle is a depreciating asset, so most lenders will only grant you a term matching the current amount of months you have with your current lender. Meaning that if with your current lender you have 48 scheduled payments left, don't expect for the new lender to extend your term to 60 months; most likely they'll match it at 48 months. Also, on auto refinances lenders will only lender up to what the vehicle is valued out. So if you owe more than that, you either have to pay down the difference or forget about refinancing your car.

Q: What are some pros and cons of refinancing my car?
I bought it about and year and a half ago and my credit score has improved; not mightily but it has improved enough. Is it even a good idea to refinance a car?

A: Auto finance is what I do for a living and I would say only if you can reduce your interest rate a lot. You already have 18-months of payment history with your current lender, unless you can save a substantial amount of money by refinancing there would be no point in switching.

Q: How long should i wait before refinancing my car?
i pay 20% interest on my car. OUCH! i know. the dealership said i could refinance in about 2 years and it will lower my interest and my payments BS? or was he stating the truth?

A: 1) Usually you can refinance at any time. Check the contract to see if there is a "prepayment" penalty. 2) Most people wait a while to refinance because they have paid fees in connection with the original financing and are not anxious to incur those again. 3) You seem to be assuming that you have to refinance with the original dealership. That is not true. You should start asking around with other car financers, such as a credit union, a bank, an online credit source. See if you can find a better deal. And if you do to find something better, you can go with that company or use their offer as a basis for renegotiating with the dealership. The place where I would start is with bankrate.com. It has good information about rates for used car loans and related information. Good luck!

Q: Should I trade my car before or after refinancing?
The value of my current car is more than the price of the car I want. I know the negative equity will be added to the price of the new car. Is it better to refinance the car before I trade it in or after.

A: you shuld trade it in and if your in the market for your a new one think same year trade in.I work for one of the largest dodge dealers in my area and there are used 07 that are on the lot for sale at a real discount.Used cars have already deprechiated and still have value

Q: Refinancing car loan for longer period?
An unconventional question, but...is it possible to refinance a car loan for a longer period of time? For instance, if you have 48 months left on your loan, can one refinance w/another company for 60 months to simply lower the payments for the immediate future? Thanks!

A: Yes it's possible but only if the lender you're financing with offers a competitive, the same or lower rate than the one you're financing thru right now.

Q: Does refinancing your car help your credit score or build your credit?
I just refinance my car and lowered my interested and my monthly payment and I was just wondering, does refinancing your car help your credit score or build your credit?

A: ignore half of what the last guy wrote. im the finance director for a dealership. i arrange 100's of autoloans per month. refinancing the loan can help your credit depending on who the loan was with in the first place and who you refinanced it with. if you moved from a secondary (high interest) lender to a primary lender that alone cane help. but if you refinanced w/ a smaller company it can often hurt your credit. also local banks and credit unions dont help your credit as much as a national lending institution. gmac/toyota/chryser/ford/nissan or some of the national banks. also one of the thing that is measured in your credit report is the time that account has been reported. if you keep paying off loans or refinancing often you dont get a long enough history reported on that account. that alone can pull your score down. usually anything under 12 months hurts. also your credit is measured in percentages. if you financed $10k and you owe $10k then there is a 0% margin. but if you financed $10k and you owe $5k. then you have a 50% margin. that works more on revolving loans (credit cards, mortgages, autos, but mostly credit cards). anytime what you owe is close to the orginal value it will lower the score. the further apart those two are the better it can be for your score. ALWAYS have credit cards. im not saying use them but they are vital to credit scores. they play a large part in debt to income ratio (the % margin i talked about above) the close to 100% avail you have the better you are. (i.e. $4000 high, owe $0, therfore you have $4k avail if needed) that means you are stable and if needed have cash in reserve to get. general rule of thumb. dont refinance unless you can drastically lower the interest rate or reduce the term of the loan. other wise you are just opening another loan.