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Question: Credit score is 620, can i refinance my auto loan?

(Posted by: festy1986 on 2008-08-11 18:01:14)

When I got my current car, I had a terrible credit score, since then it has improved dramatically yet it's still not the best in the world. I have $3, 000 dollars left on a used car from a buy here pay here place, my ideal scenario would be to trade it in for a new used car at a place where the car is of better quality, but I know my car isnt worth 3, 000 is it possible to have another car company buy my loan, trade the car in and get a loan through them and add the remaining balance on my old loan for a new car? I spend 130 every other week, for a grand total of $260 a month, with insurance im pumping almost half of my monthly income after taxes into my car. What is my best bet?

Posted by: Kate on 2008-08-13, 05:52:24

From a refinance perspective you do not fit the bill for a good refinance. In fact, if I read your situation correctly, you only owe another $3k on your car? Refinance institutions (banks and CUs) won't refinance you at that amount. It's too low. Your best bet is to just pay off the current loan. If there is nothing wrong with the car, you need to stay in it and away from new cars right now. You'll lose more money paying on a new car.

Posted by: Heather on 2008-08-11, 18:08:11

You'll be paying a high interest rate.

Posted by: Robert D on 2008-08-11, 18:11:32

Pay it off and then make payments to yourself then buy a better car with cash. Why finance something that goes down in value? daveramsey.com

Posted by: roeungt on 2008-08-11, 18:18:39

For the love of ___________ (fill in the blank), do not refinance unless absolutely necessary. 620 isn't even that great of a score - Nowadays, lenders think 620 blows. The best is to just use and pay off the car until the car dies. Then, that way you can get a better loan with a better score. But, if funds are as tight as you say (noone should be spending half of their income on a car unless they're sleeping in it too) - The best bet is to get a loan from a bank, which gives you a better rate than any car company, to pay off the car in full and then you can sell the car and then go get the better car with a good down payment.