When Should I Refinance My Auto Loan

by Connie
(Chardon, OH, US)

Question: I need some guidance on when I should refinance my auto loan. I have a 2007 Jeep Liberty with almost 89K miles on it. I still have 42 months left on my loan at $406.85/month at like 22% interest.

I tried to refinance months ago and was denied. My husband had a past repo that should be falling off soon that was paid and most of the negative data, collections, etc. should be falling off my credit in 2012.

I'm trying to figure out what to do to refinance this and get a better rate and lower payment without extending the loan as it already is a long loan and out of 65 months still got 42 months left as it is.

The high payments are hard with hubby not working and me working part-time. He has back problems and not sure if he is gonna have surgery or what our future holds so confused when I should refinance my auto loan. Should I try to refinance soon or wait till most of my negative credit clears off next year or if I could refinance more than once and do it again then?

Please help! Need to get this paid off and have more reasonable interest. We only had 1 30 day late when he lost his job and had to do a few deferments because of his back issues at work so a lower payment I think would be best and can always pay more if possible too hmm.




Answer: Hi Connie,

From what I took from your question it sounds as if it may be best to wait until at least the repo, which sounds like it was paid after the fact, falls off.

This really doesn't look good to lenders (any type of repo) and refinancing is actually a bit harder than a straight purchase, so this being gone would definitely be good.

As for the other credit issues, I'm not sure what they are, how many of them there are and how big they are.

I'd say any real big discrepancies you may want to wait to fall off, but if they are simply some $80 medical collections, then you may be able to go forward and have a lender overlook them.

My best guess for you, depending on when you decide to do this, would be to look to a credit union to see if they can help.

You could also check with Money Aisle to see what lenders (they have close to 200) they might have that can help. Here is a link http://www.moneyaisle.com/a/1016.html

Hope this helps,
Justin