22% interest on car loan (pay, rate, credit, refinance)

[darrell2525]

Hello,

Currently, my friend don't have car and need to get one. and have bad credit, dealership offering him 22% interest rate for 6 years on a used car cost $17k.

After two years of payments on time can he refinanced for a cheaper interest and lower loan term (maybe 2-3 years).

Thanks,

[UntilTheNDofTimE]

I wouldn't touch that loan with a 10 foot pole. He'll owe 200% of the cars worth in 2 years and still owe $14,000 after paying $5,000 in interest.

[darrell2525]

Originally Posted by UntilTheNDofTimE

I wouldn't touch that loan with a 10 foot pole. He'll owe 200% of the cars worth in 2 years and still owe $14,000 after paying $5,000 in interest.

Thank you,

But he don't have no car man. He has a family and need to get back and forward to work.

Can he refinance in 2 years or something?

I'm trying to give him good advice.

Thanks,

[Hemlock140]

The biggest issue is the amount owed if wrecked being more than the car is worth, so he would also need gap insurance. Why does he need a $17,000 car? There are several brand new cars for less than that, and many good used ones. If he's going to pay that kind of interest, at least keep the loan as low as possible.

[darrell2525]

I will tell him to take the loan.

Pay on time for 2 years, and refinance for cheaper interest for 3 more years. So basically saving a year off the original loan.

Thanks

[darrell2525]

Originally Posted by Hemlock140

The biggest issue is the amount owed if wrecked being more than the car is worth, so he would also need gap insurance. Why does he need a $17,000 car? There are several brand new cars for less than that, and many good used ones. If he's going to pay that kind of interest, at least keep the loan as low as possible.

Its a 2011 Jeep Grand Cherokee.

He has family, so this car works for him.

[Petunia 100]

Originally Posted by darrell2525

I will tell him to take the loan.

Pay on time for 2 years, and refinance for cheaper interest for 3 more years. So basically saving a year off the original loan.

Thanks

This will only work if he is not upside-down on the car and his credit score improves.

[darrell2525]

Originally Posted by Petunia 100

This will only work if he is not upside-down on the car and his credit score improves.

Thank you Petunia,

How can I confirm the value of the 2011 Jeep Grand Cherokee with 76K miles on it?

Thank you,

[Lowexpectations]

Originally Posted by darrell2525

I will tell him to take the loan.

Pay on time for 2 years, and refinance for cheaper interest for 3 more years. So basically saving a year off the original loan.

Thanks

So why did you start this thread? If you need the car you should save some money to eat into the 22% interest problem

[Petunia 100]

Originally Posted by darrell2525

Thank you Petunia,

How can I confirm the value of the 2011 Jeep Grand Cherokee with 76K miles on it?

Thank you,

You can look at kbb.com to get an estimate of the value now. However, you can only guess what the value will be in 2 years. The car will have more miles, etc.