indef
Lv 5
indef asked in Business & FinanceCredit · 1 decade ago

how much money could i save by refinancing my auto loan?

about 6 months ago i bought a vehicle and had to take out a loan to complete the purchase. the lender basically told me that because my credit score was so crappy (around 400-ish) that i would have to deal with an insane APR of 18% for 24 months (killer monthly payments of $500) to get the loan.

as i was very desperate for a vehicle i went through with this loan and agreed to set up alottments that have raped my paycheck every month. my strategy then was to pay on the loan on time for 6 months and then seek a new lender through which i could hopefully refinance my loan and get a reasonable APR. currently i only owe about 7-8 grand more.

i've also been paying timely payments (for 6 months) on my cell phone as i have a contract with this as well. when it comes to credit and credit score i have to confess that i don't know jack about it. but it would seem to make sense to me that in 6 months time that my credit score should've been improving greatly for the last 6 months because i've been making all my payments on time.

my question is, now that i'm thinking about refinancing my auto loan, what can i expect my monthly payments to go down to if i still want to pay this loan off in 24 months?

im in the military btw (i dont know if that helps or not...)

9 Answers

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  • ?
    Lv 5
    1 decade ago
    Favorite Answer

    It doesn't cost anything to try for a refinance... As for military, I am not sure if banks give a discount but I would sure google it to see. I would pick 3 banks to run your info for a refi. 1. A credit union (if you can find one you qualify for) 2. A local bank (they can be more flexible than the big time lenders) 3. A large bank like a Wells Fargo.

    It makes no difference to your credit if you apply at one bank or four, as long as they are all within 30 days of each other. I would think, with your payment history, you should be able to drop that interest rate!

  • 4 years ago

    1

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  • 1 decade ago

    Most likely, you are underwater on this car loan. Even though you have made on time payments for 6 mos, it takes a heck of a lot longer to get your credit back on track, especially if you were in the 400s! It is going to take 18 mos to 2 years to get your score back on par where you could get a decent rate.

    Your main problem is, you owe more than the car is worth. This means, you would have to have some money to refi, IF you could even find someone who would refi the loan at a lower rate.

    A cell phone bill does not build credit. Cell phone companies only report to the credit bureaus if you default on the contract and skip out on paying them.

  • Anonymous
    1 decade ago

    At this point you will NOT get any better interest because what they were trying to tell you was it would and doe take about 18-24 months of consistent payments to up your credit score.

    In the mean time WHAT is making your scores so low because it it is unpaid collections your score will not improve very fast at all.

    Thank you for your service .

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  • Anonymous
    1 decade ago

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  • 1 decade ago

    Actually, not that much because of the shortness of the loan.

    To pay off $8,000 in 18 months remaining, even at 6%, you would be paying $446/mo.

    Source(s): best guess with the limited info
  • Anonymous
    7 years ago

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  • Anonymous
    7 years ago

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  • 5 years ago
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