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Posted in Auto Loans
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kay2345

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Should/can I refinance my current loan for a better interest rate?
I bought my car last Feburary (2015) for $10K, but my credit wasn't very well developed at the time (I'm 20) and my parents' credit scores weren't great either (my dad cosigned). Long story short, the dealership made EIGHTEEN credit inquiries and I ended up with a ridiculous interest rate (and a knock in my credit score) and I pay about $275 a month with a 60 month term (I think). I've made my payments on time every month, and my credit score is now at 660 for TransUnion and 649 for Equifax. My parents' credit is still in the 500's due to bad decisions with credit when they were much younger, but they've made major improvements and their income is more than enough to cover my loan if I wasn't able to pay for some reason, which I still can. I really want to refinance to get rid of this interest rate, but I'm not sure if I should wait until my credit score and my parents' improves, or if I could even get a better rate. Help!

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You do not say what your loan APR is.  How much lower can you drop it I am not sure, and for every try there will be a hard inquiry on your report. There is too much unknown to say if you could get a better rate. Remember the auto loan FICO can be way different than the Vantage score you see here. my last auto was about 40 points lower than what was showing here.  And 660 is not a good score, you well into 700's to even think about getting the best rates advertised. Also you are now 1/3 of the way through your loan, the amounts you have been paying in the past were mostly interest, but as you progress through the life of the loan, a larger amount is going toward you principle, so the math as to if you can save more by what interestedt rates is what you need to do to know.  The simple amoratization calcultor here in CK should be of great help when seeing what type of interest rate you need to get to show a savings.

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