I just recently bought a car from a dealership with financing. At the time of purchase I was a temp-to-hire working in IT. About a week later I got a raise doubling my income. I just graduated college so my credit history is only about 4-5 years old with a fair amount of debt on a credit card along with student loans. All debts have clean payment records.

It was very hard for me to get financing alone and ended up with around 10% interest rate. The car totaled around 13,000. My parents said they would co-sign but were not around at the time of purchase. Is it possbile to re-apply at a credit union or something similar for a new loan to cover this one with a lower rate? Is that smart?

  • Do you own any real estate, an appartment or something else? If so, what's the interest rate, and how much of the real estate value is part of your mortgage (I'm assuming you didn't pay cash, otherwise you would have no problems getting a car loan). Sep 14, 2016 at 5:54
  • no real estate at the moment, poor college grad
    – TinyRick
    Sep 14, 2016 at 15:11

2 Answers 2


Yes, it is possible for you to refinance your existing auto loan, and so long as you can get the loan on more favorable terms (e.g.: lower interest rate), it is absolutely a smart thing to do. In fact, you would be well advised to do so as soon as possible if the car was a new car, if you refinance a NEW car soon enough you will likely still be able to get new car interest rates. Even if it is a pre-owned vehicle you shouldn't wait too long, since your car will only depreciate in value.

You will almost certainly get more favorable terms from any bank or credit union directly then you would when you go through the dealership, because the dealership is allowed to mark-up your interest rate several percentage points as profit for themselves. Your best bet would be to go to a local credit union, their rates tend to be most competitive since they are "owned" by their members.

  • This is a pre-owned vehicle, but I will look into a local CU right away to see what they can offer me.
    – TinyRick
    Sep 14, 2016 at 15:13

The key word you are looking for is that you want to refinance the loan at a lower rate. Tell banks that and ask what they can offer you.

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