How long should you wait to refinance an auto loan?
Morgan A asked:
My friend just bought a used car at a 12% interest rate for 60 months. I think that is pretty high…
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on Thursday, July 2nd, 2009 at 7:38 am and is filed under Car Loans.
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My friend just bought a used car at a 12% interest rate for 60 months. I think that is pretty high…
July 3rd, 2009 at 12:39 pm
how their credit score ? if the score over 720 then that’s high …
July 4th, 2009 at 6:00 pm
Good luck on trying. Used cars don’t command low interest rates, but it depends upon the car’s value, condition and age of the car and the credit score of the borrower.
If your friend got financing through the car dealer, refinancing isn’t going to happen. They are making big bucks off the interest, they aren’t going to let it go.
Best bet is to refinance through a third party – credit union or bank.
July 5th, 2009 at 6:19 am
12% is a ridiculously high interest rate given current conditions. Your friend has been scalped.
If there is no pre-payment penalty in the loan agreement, this loan should be refinanced immediately.
July 7th, 2009 at 9:11 am
Well that would mean his credit score is not very good. Did he finance 100% because then he is shot the car lost over 25% of the value after he drove it off the lot. He is not going to find a better deal for the full amount if he can get the full amount. Refinancing cars never helps only makes thing worse as you will be further out of equity, and lets face it he will owe more than he can get in a few years when he want to trade it in thus getting evan further in debt.
July 10th, 2009 at 8:55 am
Holy Schnikie that’s a high rate. I’d refinance that as soon as possible. The terms for paying an auto loan vary, depending on the original loan. Many banks have no early payoff fees, so you can in theory pay off a loan a week after you open it. Other lenders have early loan termination fees, or will have clauses requiring full payment of the interest before it releases the lien.
A comparison to whats available is good too..
All the best to you.