I bought a 2017 Mazda CX-5 back in January, it was a Saturday afternoon in another town so I just financed through the dealership. The loan is through Wells Fargo and is at 6.19%. I think my credit score is in the upper 600’s to low 700’s. I just refinanced the house in December to get it out of my ex-husband’s name and into mine. The bankruptcy we filed in 2015 should be dropping off in February of 2022. I called the credit union that I refinanced the house with and at my current score range the rate would be 5.25% but no fees other than $16.50 title fee. I still need to check with the bank I work at, but I don’t think our rates will be lower. I’m trying to decide whether it is worth it to go ahead and refinance or wait a few more months to hope my credit score improves a lot, knowing that interest rates might be going up.
My payment is currently $325.85 per month but I have been paying $400 per month to pay down the principal and pay off sooner than the 6 years it is set up on. Current principal balance is $18,032.71.
Is there enough equity in the house now (values have skyrocketed) that you can get a HELOC on the house? If so, that rate would likely be much lower, you could pay off the car entirely, and then only have debt on the house.
Also, there are a lot of ways that you can increase your credit score a bit. Charge a little on every card you have every month, and pay it off on time and in full (I’m assuming that you are not carrying any credit card debt). Ask your credit cards to increase your credit limit. If you have any bad debt, negotiate a payment of a percentage of the debt IF THEY WILL AGREE TO REMOVE the bad debt report entirely, and of course get this in writing.
If the answer is NO to everything, than go ahead and refi with the credit union. It’s not gonna cost you anything, and you do get a cheaper interest rate. I doubt that they will give you a 6 year loan, though, especially on a 2017 car. You can always refi again when your credit score improves. Keep paying off that car loan as fast as you can - it’s probably your highest interest rate debt.
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I was going to take out extra when I refinanced the house to buy a vehicle, since the rate was 3%. The appraisal came in high enough to cover the equity part, but they had my DTI figured at over 40% without adding the extra amount, so I couldn’t go higher. They only included my income from my job (which is only about $30,000/year) and did not include the check that my younger two kids draw because their father is on disability. That is in place of him paying child support and goes towards household expenses, so not sure why they didn’t count it. The other problem was my student loans, which are about $48,000 (originally about $28,000 but lots of interest added on). I am on an income based repayment plan and the payment is set at $0, but they used a payment amount of about $500 or so per month in figuring DTI.
I do some have credit cards that I use and always pay off any balance each month. They have increased the credit limit on some of them without me asking. I don’t have any bad debt, didn’t even have late payments before filing bankruptcy, but my ex got fired and it was our only source of income at the time so we wound up filing bankruptcy.
My credit score seems to have taken a hit since December, apparently because I have not paid down enough on the debt over time(it is new loans). Plus the loan on the house was previously in my ex-husband’s name only so it wasn’t showing that debt under my name. Of course I also wasn’t getting credit for making the payments for the last 5 years since it wasn’t in my name.
The credit union will only go 5 years on my vehicle, but it only makes the payment slightly more, so I am okay with that.
You can also ask the current lender to lower your rate. They might match the rate your CU is offering, or maybe the rate they are now offering. For them, they’d rather have a loan at 5% than totally lose one at 6%.
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I am not a lender but where I work is offering 1.49 % for loans during the month of July for 2017 and newer vehicles with credit score of at least 680. Don’t know what effect the bankruptcy would have but it wouldn’t hurt to look into it. If I can figure out how to do a PM I could give you or anyone else some details if you are interested.
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I checked with my bank today and it would be 3.9% for 60 months, so I am going to refi with them, it will also be more convenient besides saving some money.
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Glad you found something that works for you.