Auto loan refinancing question

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These offers are something like we can lower your auto loan rate from 7.9% to 2.99%. Are these offers legit and what are the loopholes or catches?

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7.9 for auto loan is ridiculous unless your credit is a disaster, which in this case, you probably shouldn't have a car loan.

rsuaver said:   7.9 for auto loan is ridiculous unless your credit is a disaster, which in this case, you probably shouldn't have a car loan.
  Compared to double-digit credit card rates isn't 7.9% a decent rate? Or are auto loan rates figured differently? What credit score would trigger a 7.9% auto finance rate?

Double-digit credit card rates would send many here to the fainting couch, too.

Mostly via credit unions, there are auto loans available around 2%. If you can't get something like that, I agree you should not get a car loan.

bbrite said:   
rsuaver said:   7.9 for auto loan is ridiculous unless your credit is a disaster or the dealer is robbing you because they judged you were an idiot plus an impulsive buyer that wanted the car "now" regardless of what rate they offered you, which in this case, you probably shouldn't have a car loan.
  Compared to double-digit credit card rates isn't 7.9% a decent rate? Or are auto loan rates figured differently? What credit score would trigger a 7.9% auto finance rate?

  Credit cards are unsecured loans.  Auto loans are secured loans.  If you default on your credit card, they take your plastic card away and write off almost the whole thing as a loss.  If you default on the car loan, they take your car away and sell it at auction to recoup a large portion of the value.

Credit cards are not meant to carry a balance on, specifically cards that have the double-digit rates (rewards cards).  People carrying balances on double-digit interest rate credit cards are ignorant.*  I have seen a few credit cards that are down mid single-digits, which are still not "good" to carry a balance on, but are in line with other unsecured credit (like "personal line of credit" or "signature loans").

*ignorant is not an insult, it means lacking in information or not knowing any better.  No one knows anywhere near everything about everything.

edit:edited to add to rsuaver's quote an alternate reason someone might have a 7.9% car loan, even if they had great credit.

Bend3r said:   
bbrite said:   
rsuaver said:   7.9 for auto loan is ridiculous unless your credit is a disaster or the dealer is robbing you because they judged you were an idiot plus an impulsive buyer that wanted the car "now" regardless of what rate they offered you, which in this case, you probably shouldn't have a car loan.
  Compared to double-digit credit card rates isn't 7.9% a decent rate? Or are auto loan rates figured differently? What credit score would trigger a 7.9% auto finance rate?

  Credit cards are unsecured loans.  Auto loans are secured loans.  If you default on your credit card, they take your plastic card away and write off almost the whole thing as a loss.  If you default on the car loan, they take your car away and sell it at auction to recoup a large portion of the value.

Credit cards are not meant to carry a balance on, specifically cards that have the double-digit rates (rewards cards).  People carrying balances on double-digit interest rate credit cards are ignorant.*  I have seen a few credit cards that are down mid single-digits, which are still not "good" to carry a balance on, but are in line with other unsecured credit (like "personal line of credit" or "signature loans").

*ignorant is not an insult, it means lacking in information or not knowing any better.  No one knows anywhere near everything about everything.

edit:edited to add to rsuaver's quote an alternate reason someone might have a 7.9% car loan, even if they had great credit.

  Thanks, but still part of my question on pros and cons of unsolicited offers that promise (to swap) 2.99% on a 7.9% auto loan is left unanswered.

Who is the lender.

bbrite said:   ...  Thanks, but still part of my question on pros and cons of unsolicited offers that promise (to swap) 2.99% on a 7.9% auto loan is left unanswered.
  
Who are the offers coming from?   If its a legit lender then I don't know what your concern woould be.

3% rates on an auto loan are typical for good credit.  Its nothing to set off red flags.

Your local credit union probably offers 3% or better.

If your credit is in the 600's then thats probably why you've got 7% loan.   If your credit is in the 700's then you are paying too much.
 

kilacam19 said:   Who is the lender.
  They are local and probably not known nationwide: Smart-Money-Mgr.com

bbrite said:   
kilacam19 said:   Who is the lender.
  They are local and probably not known nationwide: Smart-Money-Mgr.com


I'm not going to do them the favor of putting up a link, but this is my favorite part on their website!  How strange.

>     3.  Once an approval is received, our ladies will review your new terms and savings with you and answer any questions you may have. 

Anyway, the most obvious part about their scheme is how difficult it is to identify what their loan rates are.  If they aren't completely transparent in how they do business, there are probably better places to go. 

OP - what is your credit score?  If you don't have any derogatory items on your credit report, get yourself into a local credit unioin to refinance that horrible 7.9% loan.

You can do better with USSFCU if you have decent credit.
https://www.ussfcu.org/rates2.php

Repeating for good measure, and in case the OP didn't see this question the first few times...

WH_T  _S  Y__R  CR_D_T  SC_R_?

You should buy a vowel.  I promise you I won't charge you 7.9%.  

RailroadTrack said:   Repeating for good measure, and in case the OP didn't see this question the first few times...

WH_T  _S  Y__R  CR_D_T  SC_R_?

You should buy a vowel.  I promise you I won't charge you 7.9%.  

  I haven't checked lately. It's probably not stellar.

bbrite said:   
RailroadTrack said:   Repeating for good measure, and in case the OP didn't see this question the first few times...

WH_T  _S  Y__R  CR_D_T  SC_R_?

You should buy a vowel.  I promise you I won't charge you 7.9%.  

  I haven't checked lately. It's probably not stellar.

  

Then forget the 2.99 as they are not going to give that to you.  The 7.9% rate you have now is most likely the best rate you will get.

The "offers" you are getting are subject to review and approval ( read that: ads) and they assume excellent credit.

 

I also received this pre-approved letter from INOVA Federal Credit Union (inovafcu.org) for as LOW as 4.50% APR.

bbrite said:   I also received this pre-approved letter from INOVA Federal Credit Union (inovafcu.org) for as LOW as 4.50% APR.
  

You are most likely pre-approved for 27.9%, which falls into the class of "as low as."

Pre-approval letters are nothing but ads. They are junk mail.  They are NOT going to give you the same rates as they would someone with stellar credit.

 



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