Need some advice...

[Rowdy S13]

Ok guys I need some advice from the financial experts here. So currently I have a 2007 Chevy Cobalt LS and my payment is $420.76 a month (23% interest), my payoff is $15000 or so. I can afford the payments, but I don’t want to anymore. Do I have ANY hope of getting rid of it? I would be MUCH happier with $200-250 a month payments. I appreciate everyone’s insight into my lil issue.

Thanks,
Sean

 

[Adam]

That seems like a very high interest rate. Do you have the ability to get a loan with a lower rate (refinance, basically)?

 

[jamie2112]

I have never heard the chevy cobalt ls before. Do they sound good. 15000 is alot for speakers.......

 

[unreal.freak]

Unfortunately with the high interest rate, you probably havent been paying alot of principal loan amount. That is gonna put you owing alot more than its worth. I dont really have any advice other than try and pay extra on it untill you get it payed off and learn from the experince. Sometimes you have to take a higher interst rate when your credit is lacking. If this is the case with you, try and build your credit back up by making credit card purchases that you have enough cash to pay the full amount when the first statement is due. That will help you build your credit up and maybe when you make another purchase you can get a better interst rate. I wish you luck in whatever you decide.

Peace,
Tommy

 

[Rowdy S13]

Yeah my credit is bad, but getting a lot better. Like it was said with the high interest not much has been paid on the principal of the loan. So with that refinancing only saves me a small amount, not even enough to bother with it. I'm around $7000 upside down on it, which is the killer. I think I’m stuck for right now.

Sean

 

[Adam]

Sean, I mentioned refinancing in regards to getting a lower interest rate. Now that your credit has improved, can you get a better rate?

Also, do you own a home? If so, you might be able to get a home equity loan with a lower rate, which you could use to pay off the car loan. Just one thought. There might be other types of loans that you could look into that would get you a better rate and lower monthly payments.

 

[yettitheman]

ah, this is why getting a GOOD cheaper used car is always a better financial decision.

A new car depreciates as soon as you touch the key after you sign your name.
An older used car... it tends to fall off at the rate it deteriorates, market value, and age. So, usually much slower, so long as it isn't rusty like a Pinto, gets 5 MPG like a Hummer, and isn't from 1984.

Now, I like new cars. I test drove a Cobalt SS a month back, but the 24k car and thinking about $580 a month payment..... NAH

 

[Exit]

If the best they could give you was 24% APR interest, then you need to concentrate on building up your credit rating first. Buy stuff (gas, food, etc) that you have to buy anyway and put it on credit cards. Then pay the credit cards off each month on time to avoid more 24% interest. If you do this for a year or two your credit rating should improve to the point where you can get a decent interest rate on your borrowing. There are 0% interest on some new cars, but I believe you have to have good credit to get the best rate. My loans are limited to three years duration so I have about the same monthly payment as you for about the same kind of car. I only have 36 payments on each though. You might try paying off your monthly car payment with a credit card and then paying the credit card on time each month so you get double the credit for paying on time. If you are disciplined about paying the credit card each month and not overspending, then the credit cards can give you a very good rating. Your car loan will also give you a good credit rating it you pay it back on time. If you are an impulse buyer, this would be a bad recommendation for you.

 

[ParadigmDawg]

Do you have gasoline, can you find a match, is there any backroads where no one can see you?

 

[Matt34]

Save $3-4k if possible and refinance it, maybe use your tax return. Banks and credit unions will work with you more if you can bring some cash to the table.

 

[Halon451]

I don't envy your position, as I've been down that road before and it hurt like hell. Basically by the time I turned 24 I had racked up a significant amount of debt and had shattered my credit rating. Eh, young and foolish in my ways, like many of us. At any rate, about that time I decided to join the military so went in with the intent of a.) paying all this debt off, and b.) building up some good credit.

The first car I financed after a few years of paying off this debt hit me like a meteorite in the interest rate department. Something to the tune of 26%. The car was already four years old by the time I bought it, and I ended up owing far, far more than it was worth after the ink had dried. But, this was a bullet I figured I had to bite, and so I did.

After making good payments for about 6-7 months, I decided to apply for a low-risk, low credit line credit card, and got accepted. Went out and purchased (go figure) some speakers for about $200 on it, turned around and immediately paid it off. I did this a few times, then got another card, did the same routine.

As for the car, I was indeed stuck with it until it was paid off. I could have possibly refinanced, but in the end, wound up paying it off in full, got the title (at last), and now have three credit cards with a very respectable credit line, a house mortgage, two cars and an excellent credit score.

You may simply be in a situation that you have to live with for a while, if you continue to take necessary steps to improve your credit rating - focusing less on "what I am paying each month" and more in terms of "How are my actions going to affect my credit rating in the future?".

It's tough man, no doubt about it, but - and don't take this negatively - but, if you had poor credit to begin with, purchasing a $24K car right off the bat, might not have been the wisest choice given the circumstances.

 

[Rowdy S13]

I appreciate all the advice so far guys, and keep it coming. To shed a little light on to how/why I am here Ill give the short story. I started out doing everything right for my credit (or good enough, hard to say I did EVERYTHING right) had loans that I always paid on time. Credit cards that were being used how they should. Then I got a little greedy, started charging to much on my cards, not way to much, but over what I should have. Then I wrecked my car and decided to go buy a nicer car and "grow up" a bit. I knew what I could afford, and I went over. Then after a while I was getting buried, stopped paying the car insurance, then got in a accident with the car (no insurance). Couple that with some medical bills, and all the other monthly expenses I was shot so I filed bankruptcy. I can tell you this, I learned a hard lesson doing that, and I will not go back.

Moving on I had 2 cars (both paid for) and I needed a truck for work and to tow the race car with. So I bought one for a OK price and not so great interest. Payments were fine and I paid them no problem every month. After a while I no longer needed the truck, I was laid off for a long time, and gas was on the way up. Time to ditch the gas guzzler so I did. I was upside down on the truck (around $4000) and needed something cheap and good on gas. I didn't think I could roll that much onto a cheap car (I was told I couldn't) so I needed something brand new. Looking around the cobalt was the cheapest new car I could find, so I got one. They bent me over on the interest, and my insurance went up but I had to be done. When gas was really expensive I was still actually saving money over owning the truck (just not much). So with all that Ive had the car about 1.5 years now, and have had some credit cards in the mean time. My credit is getting much better, but it would do even better without $500 a month for my car and insurance.


Sean

 

[jinjuku]

Looking around the cobalt was the cheapest new car I could find, so I got one. They bent me over on the interest, and my insurance went up but I had to be done.

Sean

Doesn't sound like you looked to hard to find a lower priced new car. Not sure if you really have learned your lessons (trust me I have been there).

I have a 9 (going on 10) year old Nissan Altima. When it hit 9 I started a 4% money market that I put $600/month into. I will do that for the next 3-4 years that I hopefully have the car.

Instead of paying someone % on money they loan me, I simply loan it to the bank. At the end of 3 years principal will be 21,600 and 4 years (knock on wood) 28,800 plus interest.

I will buy my next car outright.

Far as your current loan:

1. Do you know your current credit score?
2. Do you know and understand your current debt to income ratio?
3. Have you shopped your insurance?
4. Do you attempt to send another check with your payment that is sent with a note for 'Principal only Payment'.

The more you pay on principal, the less you pay in interest overall. Is there any belt tightening you can do? Pick up a second job for 1/2 year, eat out less, get movies at the library instead of $9/ticket?

You could play hardball with the lending agency. Tell them you may have to default if they can't lower the interest rate.

Please tell me you don't have a 72 month loan.

 

[ParadigmDawg]

I believe someone has a HT system based around Canton's and is also looking to buy a new sub. One could probably sell all his gear, take the money and refinance a car until he gets out of the mess.

I would still burn it though.

 

[Rowdy S13]

Doesn't sound like you looked to hard to find a lower priced new car. Not sure if you really have learned your lessons (trust me I have been there).

I couldn't find anything at the time for less. I have the base model with NO options, not a SS or anything.

I have a 9 (going on 10) year old Nissan Altima. When it hit 9 I started a 4% money market that I put $600/month into. I will do that for the next 3-4 years that I hopefully have the car.

Instead of paying someone % on money they loan me, I simply loan it to the bank. At the end of 3 years principal will be 21,600 and 4 years (knock on wood) 28,800 plus interest.

I will buy my next car outright.

Far as your current loan:

1. Do you know your current credit score? Last time I saw it, 640
2. Do you know and understand your current debt to income ratio? yes
3. Have you shopped your insurance? yes, and lowerd it considerably and then fought the old company (and won) when they tried to charge me for no reason
4. Do you attempt to send another check with your payment that is sent with a note for 'Principal only Payment'. I would but I cant really afford to, maybe a small amount.

The more you pay on principal, the less you pay in interest overall. Is there any belt tightening you can do?Already have done anything I can think of Pick up a second job for 1/2 yearno way I could do that (I have no time), eat out lessrarely do that as it is, get movies at the library instead of $9/ticket?I rarely go to the movies, and I DL, also havent bought any in a while

You could play hardball with the lending agency. Tell them you may have to default if they can't lower the interest rate. I could try that

Please tell me you don't have a 72 month loan.Unfortunaly yes it is.

I believe someone has a HT system based around Canton's and is also looking to buy a new sub. One could probably sell all his gear, take the money and refinance a car until he gets out of the mess.

I would still burn it though.

I have had the stereo for a LONG time, probably 4-5 years or so. I paid for the whole system in cash at the time and wont sell for a couple reasons. 1. wont get much for it, 2. I would want to buy another one as soon as I sold.
I am not loooking for a sub, I want one but wont be buying any time soon. I need to change that in my sig dont I

I think you guys are kinda missing the point a little. I can afford the payment, and always pay it on time. I just dont want to if I can avoid it.


Sean

 

[jinjuku]

I think you guys are kinda missing the point a little. I can afford the payment, and always pay it on time. I just dont want to if I can avoid it.


Sean

Time to play hardball with the lender then. You will only really get one shot at it. It's a bluff play pure and simple.

The other way is to get another quote on a loan (at a lower %) and see if they will beat it to keep it. 15% of $15K is better than 23% of $0.00.

You most likely won't have any bargaining power until your credit score hits 692... (basically a B to B minus)

Try to start making an additional 10% principal payment only if you can.

 

[ParadigmDawg]

I am going back with burning it.....