When should I refinance my auto loan?
Mitch Asked: When should I refinance my auto loan?
I purchased a vehicle in December 2010 with very little credit history.Total purchase price was $14,900 with $1,900 down. I’m not sure what my actual FICO score was at the time but I had 0 installment credit history and only 2 credit cards that had been opened for about 2 years each. Plus, another 3 small student loans totaling $12k. Only one late payment on my credit history due to Microsoft renewing my Xbox live account without any notice. Needless to say, I didn’t get a very good interest rate (just under 12%) at the time of purchase. After 6 months of payments, the balance of the loan is about 11,500 now since I’ve been paying nearly double the minimum monthly payment of $297. I checked my credit score for the first time in over a year and according to Experian, it currently sits at 707.FYI – I have 6 hard inquiries on my credit over the last 2 years because I had my credit run 4 different times during the vehicle purchasing process which I know was a mistake. The Finance director at the dealership I purchased this vehicle through mentioned it’d be best to wait a year or a year in a half before I refinance. However, I think there’s obviously a conflict of interest there.
When is it best for me to refinance since I only have about 6 months of installment credit?
Answers:
Common Sense Answered:
Ummm, 12% isn’t that bad for “very little” credit. If you’re paying double your effective interest rate is much lower anyway. I wouldn’t bother with a refi.
Huntsman Answered:
With the way that auto loans have been a challenge to get in hand these days. The online places are fast and I have heard the are less paperwork.