Is it possible to refinance a car loan with one’s current auto loan bank or institution?

Wednesday, August 26th, 2009 at 09:06

Maricar asked:

I currently have an auto loan with Bank of America. I am paying 9.7% APR. I'm considering refinancing just to get my interest rate lower.

In fall 05, I started it w/ a loan balance of ~$27K. In 1.5yrs, I've paid down the loan to a little under $15K. Currently the car has a trade-in value of ~$19,500 and a retail resale value of ~$23K(I looked this up on Kelly Blue Book's website). So I know that I'm not upside-down on my loan.

Do I have a good chance of refinancing? My credit without prescription drugs is solid, but the only thing that I'm afraid might hinder me is the credit card balances that I currently have(although I've been paying them on time).

More importantly--Is there a chance Bank of America might be able to refinance my car loan for a lower rate? If they do this, is it possible for the loan acct.# to stay the same?(since it's within the same bank) Do banks sometimes refinance car loans that they already manage? And if I tried to refi with Bank of America, would it create a hard inquiry?

Additional Details
I asked about it at my credit union and I'd say it's a no-no. The credit union said they only determine int. rates based on what tier my credit score falls in, so my good loan-to-value ratio, length of loan, etc won't help me. They also said that I'd only qualify for a "used car" loan, and the rates are higher for those. But I will definitely try Bank of America...except I called 2X today and got disconnected each time after waiting a while. >:( Anyone have any specific car loan experience dealing with Bank of America?

Reply:

Yes it is possible. Since you have paid the loan down so much your loan to value has changed greatly. This is one of the main things that lenders base rate on.

You should have no problem refinancing with your own bank, if you do? Try a credit union, they will always beat a bank on rate anyway.

And yes it will be a hard inquire.

Source(s):

Finance Manager for a car dealer for over 7-years.

Finance your car here onsite if you need help buying one of these beauties :)