Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Auto Loans
Profile Image

Question By
Camilli0n

0 Contributions
0 People Helped
refinancing auto vs personal loan to pay off auto loan
I have an auto loan with an 27.11% intrest rate and $500 monthy payment for the next 58 months. I haven't found anyone who' refinance me, and every time I aooly for refinance my credit score owers from the inquiry I was at 640 and then went down to 580 from inquiries, and stil haven't been refinanced. I was wondering if it would be a better idea to just find a personal loan for the pay off (currently $15,510) at a lower intrest rate, or if this is even possible.

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
231 Contributions
80 People Helped

Wow,,,,that is some steep interest for a car loan, my highest CC does not even go that high.  I am afraid that without a better credit score there may not be much you can do.  I would keep the loan for the next year, the Hard inquiries wont have such an effect then.  Try to get your score up with reducing Usage percent on CC's and get your score up a bit before trying anything more.  If they will not refi you, the odds of a personal loan, even with the car as collateral, will be very low and just reduce your score more for inquiries.

Top Contributor
12 Contributions
18 People Helped

I don’t know how the personal loan is going to work out and I’m guessing you are upside down on the loan you have. Auto loans are usually bear a lower interest rate than unsecured personal loans because they facilitate a transaction and the vehicle is collateral against at least a portion of the principle. Chances are that you won’t be approved for the unsecured loan you are seeking.   

I feel bad that you are stuck in this position and the only real advice is can give to you is probably not what you want to hear. You need to make more money and get that principle down! More hours where you work now or a part time job a few days a week. Hopefully the loan you have has no prepayment penalty and interest will only accrue on the actual amount you owe. Bust your hump a bit until you are no longer under water on the car and get the heck out of that agreement! Figure out how much you owe in relation to the value of the vehicle, pay off that difference and sell it.

In the future, if you are getting a rate as high as the one you did and you must finance a car, there are plenty of reliable used cars out there that you can buy in the 4-5K range.

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.