Refinancing My Car Loan at a Lower Interest Rate

by Brittney
(Lafayette, La)

Question: I bought my car in 2007 and my interest rate is like 16.9% or something crazy like that. I am interested in refinancing my car loan at a lower interest rate and I do have a co signer.

My question is I just started a new job last week and I wanted to know how that would affect my chances, but my co signer (has been at his job for 30 years with pretty good credit and great income) what are my chances of refinancing my car loan at a lower interest rate?

I have a 2006 Honda Accord with 93,000 miles and still owe a little less than $11,000? Any tips or advice would be greatly appreciated. My car note is killing me and I am having trouble affording it.

Thank you,
Brittney

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Answer: Hi Brittany,

Based on what you've told me it would sound like refinancing your car loan for a lower interest rate would be best done through a credit union. This is especially true with the mileage you have on your Honda.

I don't know that your new job is going to have too much of an impact on your approval unless there are some credit issues that I am not aware.

Regarding your cosigner, some lenders will allow him on the loan and others will not. If it is someone that you live with, then they tend to be more flexible. If it is simply a friend, then they may not want him on the loan.

The biggest key here is going to be your past and present credit situation and how you've paid on your current car loan. If you've fallen behind on your payments multiple times, then your chances of refinancing diminish greatly.

Refinancing a car loan is typically harder than getting the original loan in the first place. Might sound odd, but the lender assumes more risk.

If you are currently financed with Honda, you may also want to check with them to see if they'd be willing to refinance your loan in house. Not all lenders will do this, so don't be surprised if they say no.

Ultimately, check out MoneyAisle to see what their lenders are offering and if they don't have a lender in your area, then look at some local credit unions to see if they can help.

Hope this helps,
Justin