Should I refinance my car?

Question

I'd like to buy a house but I want to pay my car off 1st. Sorry this is so long but gives eveything I think you'd need to know to give an intelligent answer.

2 years ago I got into a bad car deal (being timid, young, & didn't know what to do). I got a 2002 Nissan Altima in 2006 for $11,139.00. My interest rate is 22.5%. I previously had a repo (6 yrs. prior from another company) but I've also paid off a truck from the same company as the Altima the year before. Why was interest rate so high? My total balance @ start of contract was $17,197.55 (yes, price of 2- 2002 Altimas!) I didn't make much $ @ my job & because of good history w/ dealership I had no $ down or need for co-signer.

To date, 7/11/08 my balance on the Altima is $7,437.55 (pay off is summer of 2010). My ? is knowing the balance and length I have left, is it a good idea to refinance, & how much lower can my payments & interest rates be? This time I'm researching before jumping head 1st into it. Thanks in advance!

Answer 1

talk to a banker or credit counsellor   . You may owe more than car is worth

Answer 2

your upside down on this car going to be very difficult to get another loan on this car

Answer 3

The amount of money you make doesn't affect your interest rate, it affects the amount of money a lender will loan you. You can make a lot of money, have bad credit, and get a high interest rate. You can make a little bit of money, have good credit, and have a low interest rate.

If you are young, you will automatically have a lower credit score as one factor that determines the credit score is length of credit history. A repo, regardless of if it was voluntary, will hurt your credit because it shows you could not keep up with your financial obligations.

You don't list the trim level, options, or mileage of your car, so I can't check to see what the blue book on it is. If you owe more than it's worth, you may not be able to refinance it. If your credit hasn't improved, you won't get a lower rate.

Having a credit score just slightly above poor does not mean you have decent credit. If you really want a good rate, you need a credit score above 750. We can't tell you what a good rate is without knowing your score, and we can't tell you what a good payment is without knowing the interest rate and how many months you want to finance it for.

No need to get mad at the people giving honest answers to your questions.

Answer 4

Okay, here is the nice and truthful answer to your questions.

1. Yes you are most likely upside down, most car loans are for the life of the loan. That is not abnormal when refinancing but too far and lenders won't lend to you. It just depends. Look up the KBB trade-in value of your car and go here to calculate your LTV. If it's over 130-150%, you're outta luck, you need to just pay it off. The lower it is the better.

2. You should be able to refinance, but it depends on your LTV (loan to value, mentioned above), DTI (debt to income), and other financial measures. Lenders look at your score as well as past collections, lateness on payments etc. It's their way of valuing their risk of lending to you. I can't guarantee anything without knowing more.

3. If you were to refinance your $7500 loan for 24 months at about 15%, your payments would be about $364. That is just one example. I can't see your credit and each lender my company talks to is different.

4. There are pluses and minuses to refinancing, but the only way to see if it can really help you is to fill out an application and see. Send me a message if you have anymore specific questions!

Answer 5

You can't refinance, you're too far upside down to do so.  You got the horrible interest rate because you had horrid credit, and a repossession.  Sorry, but that's the way it is.

Unless your credit has improved a lot, chances are slim anyone will finance your house.

If I might make a suggestion, go here:  http://landingpages.moneymanagement.org/...