I want o refinance my car
But I was denied because of my debt o income ratio and my credit score
Although I just purchased my car
Is there another way to refinance woh a lower interest rate and to know if it is good to keep the extra coverage on there or not?
For starters, understand that anything with a motor in it, starts losing value the day you start that motor up for the first time and drive it off the lot.
Next, the interest rate on the purchase of a new car, will always be lower than that for a used car. But the way the market has fluctuated recently, it is possible over time for the used car interest rate, to be lower than the new car interest rate you may have agreed to years ago. Though I doubt that in today's climate.
If you purchased the car new originally, when you refinance it, it's no longer new. It's a used car now. So I would fully expect the interest rate to be at least one point higher, if not more. That would be regardless of what your credit score may be.
If you purchased the car new say, 5 years ago and someone is offering you to refi with a lower interest rate, then either the original financier of the car sucked you into a higher rate above the market average (maybe because of your credit score?) or the entity offering you the lower rate now, has yet to inform you of "the catch", whatever that catch may be.
Generally speaking the interest rate on your loan will be a function of your credit profile. If your DTI is high and other credit metrics including FICO score, debt outstanding, etc., you're going to be hard pressed to find a lender to give you a low rate loan. You could try talking to some credit unions, etc., but lenders are generally fairly savvy and will only extend credit to risky borrowers if they'e being adequately compensated for the increased risks via a higher interest rate.
You could either go in to a local bank or credit union to ask about refi options or apply online at various bank websites.
The reality of it is however, it’ll generally only make sense for you to refi if either/or your fico score had improved materially since you initially took out the loan or interest rates in general are lower now than when you initially took out the loan. I’m going to go ahead and assume the latter is unlikely to be true as interest rates are currently near the high end of the range compared to where they’ve been in the past 5 years.