Unsure if you should refinance your car loan? Don’t know what refinancing you car loan would do? How would you go about doing it? All these questions can be answered and will be answered here.
So what does refinancing a car loan even do? Well I would say it is a secret about saving money, but it really isn’t that much of a secret. Everyone one with a car loan can do it, its just that a lot of people never thought of refinancing their car before. Refinancing your car is similar, if not exactly the same, as refinancing your house. So what is it really doing? It makes your monthly payments lower and your interest rates drop. This allows you to pay off the balance of your car loan even faster. New reports show that it is possible to save thousands of dollars just from refinancing your car.
This is great for people that have bad credit, who are probably paying a high APR. If you just refinance your car loan you will have a lower APR, and in turn will be able to use that extra money you are saving to pay off your credit card debt or possibly accelerate your car loan payoff. Don’t be duped into thinking that you are stuck with 21-25% APR for the rest of your car loan.
Here is an example: If you were lent $16,500 for 60 months on your new Saturn and your credit was poor you are going to be stuck paying a higher APR. Let’s say it turned out to be something around 21% APR for the 60 month car loan. You start paying off your car loan for a few months and then you refinance your car loan with another lender at 6% APR. What just happened was your old payment at 21% APR used to be around $446 a month, but your new car loan payment at 6% APR is around $319 a month. That means you are saving around $7,643 over the life of the loan. That’s quite a lot of money you could be putting towards other, more important things, such as your bad credit. Now you can refinance at any time during the loan, but it would be a lot more beneficial if you refinance as quick as possible.
When sending in your loan approval, you are going to want to ensure that you wont get rejected because of some over looked clerical error. Make sure on your auto refinance loan applications are in the same name as your current auto loan and all paper work is filled out exactly the way it should be. Other wise they can’t find your current loan and you will be rejected.
You must also refinance at more then $7500, because if it is any less it’s not worth the company’s time.
You must have your vehicle information correct so that an auto refinance company can price out the car and see if it meets Loan to Value.
Lastly your auto refinance loan amount should not be higher then the value of your car, for obvious reasons.
Refinancing your car isn’t just for people that have a high APR. It can also help people with a low APR, although not as significantly as some one with a high APR.
So back to the question of “Should I refinance my car loan?” Well if you want to save some money it is a good idea. All you have to do is put forth a little work and you got it.
