When you refinance a car, you replace your current car loan with a new loan of different terms. In practice, auto refinancing is the process of paying off your current car loan with a new one, usually from a new lender. This process can have varying outcomes for car owners.
Most people refinance their car in order to save money, but this goal can take multiple forms. For example, some refinance to lower their monthly car payments, others want to reduce their interest rates or adjust the length of their loan term. And still others have more personal reasons to refinance, such as removing co-signers from their loan. No matter what your goal is for refinancing your car, it’s important you understand the possible outcomes. If you want to know when it may make sense to consider refinancing your car, this article may help: When can I refinance my car loan?
Possible Outcomes When Refinancing Your Car
Not all car loan refinance deals are the same, but customers who choose to refinance often seek one of the following goals (this list is not exhaustive):
Lower Your Monthly Car Payments
Most of the time, people seek car loan refinancing to lower their monthly payments. This priority is understandable since monthly car loan payments can have an immediate impact on a household’s monthly finances. However, your monthly payment should not be the only consideration when refinancing…
There are two ways to lower your car loan monthly payments—you can get a lower interest rate, you can extend your loan term, or both. Usually, the best way to lower your car loan payments dramatically is to extend the number of months over which you pay for your car. However, when you extend your loan term, you may end up paying more for your car in total than you would without extending it. Still, if your lender allows you to extend your loan term and gives you a lower interest rate, you may benefit by both lowering your monthly payments and paying less in total for your car. The example below will illustrate how this outcome can occur.
Decrease Your Interest Rate and/or Reduce Your Interest Charges
While it is interrelated with the goal of lowering monthly payments, some refinance customers prioritize lowering the interest rates on their loans. If during the course of paying off your car loan, you improve your credit worthiness in the eyes of lenders (they sometimes evaluate you according to the Four C’s of Credit), then you can usually get a new loan with a lower interest rate. When you lower your interest rate it may reduce the total in interest charges you pay on your car loan—assuming your car loan term is not extended or not extended by too many months.
Change the Length of Your Car Loan Terms
Sometimes refinance customers seek refinancing to change the length of their loan terms. However, this goal usually has more to do with lowering monthly payments than changing how many months in which a customer pays for his/her car.
Remove or Add Someone as a Co-Signer to Your Loan
For various personal reasons, sometimes car loan borrowers want to refinance in order to remove or add someone to their car loan. Refinancing is an easy way to do this, because the refinance process gives you a new loan with a new contract.
Want to Save On Your Car Payment?
Example: Refinancing a Car Loan
As an example, let’s say that one year ago you purchased a car for $20,000. A lender loaned you this amount at 6% interest (APR) to be paid back over 48 months. Now, 12 months later, you decide to refinance because you would like to reduce your monthly payments. So, you connect with a new lender that will pay off your old lender and give you a new loan. This new lender offers to give you this loan at a 3% interest rate (APR) with a loan term of 48 months. Effectively, by refinancing with this new loan term, you will be paying for this car for a total of 60 months (adding the new 48 month loan term to the one year (12 months) you were paying it off with the old lender).
So, what would the financial impact of a car refinancing have on how much you pay for your car? For the sake of simplicity in this example, let’s assume that you will not pay any fees to refinance and are not going to buy any service protection products with your new loan (note, refinancing almost always comes with fees and many refinancing customers opt to buy service protection products). After making the 12 th payment on your old car loan, you still owe the original lender $15,440. Your new lender loans you this amount by paying your old lender the $15,440 you still owe. Now, your first payment on the new refinanced loan occurs in what would have been the 13 th month of your old loan.
The monthly payments on your new loan would be $341.75 compared to the $469.70 per month you paid on the original loan, and, by the end of your loan, you would pay $22,040 with refinancing after the first 12 months [$22,040 = $469.70 *12 + $341.75 * 48].
Without refinancing after 12 months, you would pay $505 more for your loan, ultimately costing you $22,546 for your loan [$22,545 = $469.70 * 48]. If you would like to know more about how any of the numbers in this article are calculated, read this article on how car loan interest works.
The graph below depicts how you would pay down your car loan(s) in this example with and without refinancing.
Notice how the car loan balance with refinancing line (in orange) falls at a slower pace over the loan term than the car loan line without refinancing (in blue). Because, in this example you extended your loan term, you pay less of your principal each month and have more time to accumulate interest charges. As a result, you pay off your loan at a slower pace than before refinancing. However, your new interest rate of 3% is sufficiently below your old interest rate and in the end you cumulatively pay less interest charges than if you had not refinanced.
Please note, you should always make your car loan payments as scheduled even if you are in the middle of the refinancing process. Moreover, just because in this example you make your last payment on your old loan in month 12 and make your first payment on your new loan the next month does not mean that the car loan refinancing process can always be completed in the time span between car loan payments.
While the example above illustrates how refinancing can benefit a borrower, you should note that refinancing can have various impacts on a person’s finances. When and if you choose to refinance, you may or may not change the length of your loan, and your interest rate does not necessarily have to change – although most of the time it will. Ultimately, every car refinancing deal is different and every refinance customer has personal motivations for refinancing. For this reason, you may benefit greatly when you work with an auto loan company that takes the time to learn about your needs and will match you with a car loan that meets those needs.
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
You may refinance your car loan as often as you’d like — so long as you can find someone new to lend you the money. You might even save enough cash to make refinancing worth your while, though you should be careful that the fees and interest don’t eat up any savings you may gain.
Exactly how many times can you refinance your car loan?
There’s no legal limit on how many times you can refinance a car. That said, the lender you want to refinance with must agree, and each has its own rules. Lenders are in the business to make money, and if a lender sees that you’ve already refinanced your car several times, it might decide not to issue a loan offer.
How long do you have to wait to refinance your car loan?
You could, in theory, refinance your car almost immediately after purchase — there is no state or federal legal waiting period before refinancing a car loan. In fact, you could take an automaker’s cash rebate in exchange for manufacturer financing, then turn around and refinance for a lower rate at your bank, credit union or online lender.
These scenarios most likely apply to those with solid credit. Poor-credit borrowers may need to show a track record or a minimum period where you made timely payments in full. For example, a bank may require you to have your current auto loan for a set period of time before it will consider you as a candidate for refinancing.
TIP: Wait at least a month after purchasing a car before attempting a refinance. It may take several weeks for the dealer and your state’s department of motor vehicles to process your vehicle’s title and other paperwork.
When to refinance a car loan?
You should refinance your car loan as often as it’ll save you money or help you out of a tough financial spot. This means you probably won’t have a reason to refinance every month or even every few months, but instead, you could refinance your auto loan when you have a financial accomplishment — or a setback.
A promotion may mean a salary bump that improves your debt-to-income ratio, making you a more attractive bet for lenders. A layoff and drop in salary, on the other hand, may mean you need to refinance for lower payments.
A refinance makes sense when:
You need a lower payment. You might be able to refinance and reduce your monthly car payment by getting a lower APR and/or getting a longer term.
A long-term auto loan usually means you’ll pay more in interest over time. You could refinance for a lower payment now, and when your finances improve, either refinance again for a shorter term or put more money toward the loan principal (if there’s no prepayment penalty) so you can pay it off early. Both ways could help you save money on interest fees.
You could get a lower rate. A main goal of refinancing is to pay less in interest. You may qualify for a lower APR if your credit score or income improved since you first signed for your current auto loan. You can check your credit score here.
A refinance may not make sense if:
You’ll lose money. Each state charges a title fee when a new loan is made. Plus, each lender may charge different fees, such as origination fees and processing fees. If you save $500 on interest by refinancing but the fees for refinancing add up to $550, then you’d lose money.
Add-ons are another way lenders may try to make money on your refinance loan. Extended warranties or guaranteed asset protection (GAP) can be expensive — in the hundreds or thousands of dollars — but may appear reasonable when spread out over several years. Ask for the total cost and make sure you understand what these products do and do not cover.
Your car is too old or has too many miles. At a certain point in your car’s life, it may no longer be eligible for refinancing. Most lenders have age and mileage requirements for the vehicles they’ll consider. Requirements vary, but 10 years or 100,000 miles is often the end of the road.
Risks of refinancing multiple times
Remember financing your first auto loan? Refinancing your auto loan often comes with many of the same pitfalls, plus a few new ones.
Lowering your credit score. You have a 14-day window in which you can apply to multiple lenders and it counts as a single credit inquiry, resulting in a slight, temporary drop to your credit score. If you wait longer than that to complete your loan shopping or to accept an offer, you’ll have to fill out another application, which could count as another inquiry.
Becoming “upside down” in your loan. If you refinance to a longer term, you risk owing more than what the car is worth or becoming upside down or underwater on your loan. An upside down car loan can create problems if you later decide you want to sell the car.
Paying more in the long run. If you keep extending your auto loan, the interest charges may add up to much more than what you would have paid for your original loan.
How to refinance your auto loan?
Look up which lenders offer auto refinancing and get multiple offers. Talk to your current lender to see if it would accept an application. Don’t be surprised if it doesn’t; not all lenders offering auto loans also offer auto refinancing, and some won’t refinance their own loans. You can read more about the best places to seek auto refinancing.
In addition, don’t forget to see what your bank or credit union offers. If you already have a relationship with the financial institution, submitting an application may be easy.
Is refinancing a car loan worth it?
Refinancing can save you money, either in the short term with a lower payment, in the long term with lower interest or both. You can refinance as many times and as often as you want, as long as a lender will do the refinancing. Pay attention, though, to any fees and total interest you would pay. Know how much refinancing will cost you, including the APR in a total dollar amount, to see if it’s worth doing.
The way to get your best deal and ensure you’re paying the least to refinance is to shop around for your best offer.
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Shopping for a better auto loan — and refinancing your current car loan — will probably save you money and can be relatively painless.
Refinancing your auto loan can make sense under several scenarios. For instance, if your credit has recently improved, there’s a good chance you can lower your interest rate and monthly payment. You might also be able to shave some time off of repaying the loan, or go the other way and extend the term — lowering your payment — if you’re having trouble making your monthly payment.
Applying to refinance often takes less than an hour, and many lenders promise to make a loan decision in minutes. Here are the steps to take to successfully refinance your auto loan.
1. Collect documents
Find a recent payment stub from your current auto loan and make sure you know the following:
Your current monthly payment and the remaining balance.
The amount of time left to repay the loan in months, often called the loan term.
The interest rate you're paying.
The customer service number of the lender in case you have questions.
Dig out your original loan contract and verify that there are no prepayment penalties. If you can’t find your contract, don’t worry. The lender’s customer service department can give you the information you need, or even email you a copy of the contract.
You’ll also need the following items to complete loan applications:
Your driver’s license.
The vehicle identification number of your car.
Pay stubs from your current employer or proof of employment.
Your Social Security number.
2. Evaluate your credit
If you’ve made all your car loan payments on time for a year or more, your credit has probably improved and there’s a good chance you can benefit from a refinance.
Of course, that’s only true if you’ve also kept all your other financial commitments up to date. The proof is in the numbers, so you’ll have to find out where you stand, and you have two options for doing so.
You can pull your own credit report — that’s a history of your credit activity — or check your credit score for free to see if you’ve had any problems, such as late payments. Because you are checking your own credit, this kind of research will not lower your score. However, because each of us has many credit scores , the score you get won’t necessarily tell you exactly what interest rate to expect on your new loan.
Your alternative is to simply apply for a new loan and find out how good your credit is as a result of the application. Which brings us to …
Apply to several car loan refinance companies so you can compare interest rates and find the best offer. Note that some lenders will have requirements for how soon you can refinance your original auto loan . The application process doesn’t cost you anything, and you will quickly learn if you qualify for a lower interest rate.
One word of warning: Make sure you submit all your loan applications within a 14-day period. Similar queries in this time period are typically grouped together and treated as one, which lessens the impact on your credit score — it will trigger only a small drop, about five points.
4. Run the numbers
Using an auto loan refinance calculator , first enter information about your current loan. Input the original loan amount, your interest rate and the length of the loan in months. Then enter the balance that is remaining to be paid and how many months are left until you pay off the loan.
Next, enter the number of months you want for the new loan and the interest rate you anticipate getting. You will then see the new — and hopefully lower — monthly payment, how much you will save each month and your total savings over the life of the loan.
This is also a good time to see how much your car is worth by looking up online guides or, better yet, getting cash offers from your local CarMax or online services such as Vroom and Carvana as a baseline. If the balance of the loan is greater than the value of your car, you are upside-down on your loan . Refinancing may not be possible. Some lenders, however, will lend more than the car's value..
In some cases you may see only a small difference, or none at all. And if you are close to the end of your loan, an auto loan refinance may not be worth the hassle.
6. Evaluate loan terms
If you decide to refinance, you can leave the length of your loan unchanged or consider these options:
Pay off the loan more quickly. If you’re used to making loan payments of a certain amount, you may be able to keep the payment about the same but shorten the length of the loan. This saves you money because you’ll pay less interest over the life of the loan.
Lower payments with a longer loan. If your budget is stretched and you want a little financial breathing room, you could extend the loan term by a few months or even a year to lower your payments. This isn’t ideal because you’ll pay more interest in the long run. However, it’s better than missing payments and damaging your credit history.
7. Complete the process
If you decide to refinance, complete the application with the lender you choose. You’ll be sent the loan paperwork, and you simply respond to the lender’s requests.
Here’s a quick overview of what you can expect: Refinancing starts your auto loan over , so you’ll sign new loan documents and a new loan will be created for you, at a new interest rate, with the term length you choose. Your new lender, the refinance company, will pay off your old loan, and you’ll begin making payments to your new lender at the lower rate.
While there are many details to take care of, the entire process can be completed in a few hours.
About the author: Philip Reed is an automotive expert who writes a syndicated column for NerdWallet that has been carried by USA Today, Yahoo Finance and others. He is the author of 10 books. Read more
This article was co-authored by Hovanes Margarian. Hovanes Margarian is the Founder and the Lead Attorney at The Margarian Law Firm, a boutique automotive litigation law firm in Los Angeles, California. Hovanes specializes in automobile dealer fraud, automobile defects (aka Lemon Law), and consumer class action cases. He holds a BS in Biology from the University of Southern California (USC). Hovanes obtained his Juris Doctor degree from the USC Gould School of Law, where he concentrated his studies in business and corporate law, real estate law, property law, and California civil procedure. Concurrently with attending law school, Hovanes founded a nationwide automobile sales and leasing brokerage which gave him insights into the automotive industry. Hovanes Margarian legal achievements include successful recoveries against almost all automobile manufacturers, major dealerships, and other corporate giants.
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In the vast world of loan refinancing, some individuals and households trying to manage a monthly or annual budget can refinance a car loan to save money. People may typically associate refinancing with real estate, where high property prices can add up to astronomical sums in the form of total interest on a mortgage loan. But high-priced vehicles can also create high insurance costs, where drivers can save themselves money by refinancing to a lower interest rate. In order to refinance a car for a lower payment, try these simple steps.
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Checking & Savings
Ever thought about refinancing your car loan at a lower interest rate?
This is a quick and painless way to shave dollars off your monthly bill and hundreds of dollars off your total interest paid.
Plus, the entire process can be easy. So, if it’s that simple, why aren’t more people doing it?
One reason is that the difference in your monthly payments once you refinance isn’t nearly as significant as it would be with a home mortgage, since the amount borrowed is less, and car loans are shorter-term loans.
But even so, with interest rates on used cars hovering around 6.6%, an auto refinance might be worth your looking into, particularly if you’ve seen a significant improvement in your credit score since you took out your original loan, or if you didn’t shop around for the best rate on financing the first time.
You might not think knocking a few percentage points off your rate matters much, but it does. Let’s say you originally secured your loan with a 16.4 percent interest rate. If you have a higher credit score now, and thus can get a better deal, you’ll save plenty. So, hypothetically, if you can refinance to a 10.13 percent rate, you’d save $64 a month and more than $3,600 total.
Use the SDFCU auto loan cost calculator to discover how you may be able to lower your monthly car payments by refinancing your auto loan.
If that got your wheels turning, here’s how you do the deal:
- Understand your back story. There are a couple of reasons why your current interest rate might be higher than it should be. The first we already talked about – your credit score. The second, though, is that if you originally financed your car through a dealer, the rate may have been inflated. That’s why it’s important to shop for the right lender this time around when refinancing your auto loan.
- In the months leading up to you application for a loan, keep in mind that your credit score will directly affect your interest rate. So, be extra careful about paying your bills on time and keeping credit card usage to a minimum. Also, don’t close old credit cards you’re not using right now. These actions will help make sure your score doesn’t drop before you apply.
Credit monitoring – SavvyMoney® is a free digital resource available to SDFCU members that helps you get quick access to your credit score in online banking and the mobile app.
If you are interested in refinancing , read about our auto loans.
Weigh the pros and cons of refinancing your auto loan before you accept that refi offer.
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Monthly auto loan payments can be a heavy weight to bear when you’re paying down debt on a budget. Refinancing your car loan could help.
First, it’s essential to understand how auto loan refinancing works and how to refinance properly. If you know what you want and what the rules are, you are less likely to get scammed.
Here, we review the basics of refinancing a car loan, from making the decision to signing the paperwork and beyond.
Table of Contents:
What does it mean to refinance your car loan?
At its most basic, auto loan refinancing can be defined as getting a new car loan that has different terms than your current loan. This can usually be done with the same lender or a different lender.
Why refinance your auto loan?
Most consumers considering refinancing their car loans are doing so because they find their monthly payments difficult to manage. However, refinancing won’t fix everything about your budget.
So, what are the pros and cons?
Auto refinancing pros
You could lower your interest rate. This is one of the most common things auto loan borrowers want to change.
Especially if your credit has markedly improved since you borrowed your original loan, you may be eligible for a lower interest rate. A lower interest rate could both reduce your monthly payments and reduce the total interest charges you will pay over time.
You could extend the term of your loan. Another way to reduce your monthly payment is to extend your loan’s term. For example, if you currently have a 5-year loan, a 7-year loan may result in more reasonable monthly payments.
You could increase your monthly cash flow. A lower monthly payment means higher cash flow. If you’re refinancing because you need more money to cover debt payments or other costs, a lower payment could help.
You may like your new lender better. You may simply want to refinance because you don’t like working with your current lender. Even if your payments don’t change, if your current lender is stressing you out, a new one may reduce your financial anxiety.
Auto refinancing cons
You could extend the term of your loan. This was also on the pros list—so which one is it? Well, it depends on your goals. A longer term can help you pay less per month, but it could also mean making monthly payments for much longer than you hoped.
You could pay more total interest. A longer term could also mean paying more total interest charges. The longer you are repaying what you borrowed, the more interest can be charged.
There may be extra costs. Some lenders charge refinancing fees. Consider these carefully before agreeing to the deal.
How to refinance your car loan in 4 steps
When you decide the pros outweigh the cons, you can start the auto loan refinancing process. It will take some time to do the proper research, but remember—it’s better to be safe than sorry you spent more money.
1. Compare rates
In the past, you may have had to call multiple lenders on your own, give out your personal information multiple times, and attempt to keep all the numbers straight so you can make an accurate comparison.
Thankfully, this is no longer necessary. There are multiple websites that only ask for your information once and then you can compare various offers. Start with Debt.com’s Loan Comparison service to see what refinancing offers top lenders could give you.
Thoroughly read through the potential offers before you choose a lender. You also want to be sure that all the companies you’re reviewing are legitimate and properly accredited. Debt.com only works with accredited lenders, so using the loan comparison tool can help you avoid scams.
2. Choose a lender
After reviewing lenders and possible loan terms, you can reach out to the one that seems like the best fit for you. A representative will speak with you about the loan and what they can really offer you.
They will likely ask you for more personal information to determine your refinancing terms more accurately. When you give them more personal information, the lender will conduct a hard inquiry of your credit.
This can negatively affect your credit score, but it won’t last long. New inquiries only account for 10% of your credit score calculation.
A hard inquiry allows the lender to solidify their judgment of your creditworthiness and determine the rate and terms they can actually offer you. This may or may not match up with what you saw on whichever loan comparison site you used.
3. Ask more questions
Now is the time to raise any important questions with your lender’s representative before it’s too late. Some important things to include:
- Is there a prepayment penalty? In other words, will I be charged for making larger payments than required or paying off the loan early?
- Do you charge refinancing fees? If so, how are they calculated?
- How flexible are the terms? What happens if I have trouble paying?
Even if you feel like you’ve covered all the bases, request the offer in writing and read through it thoroughly. It may be boring, but you might just find something that causes you to rethink your next move.
4. Sign the paperwork
After doing your research, choosing a lender, and asking extra questions, you should be ready to commit. Speak with the lender’s representative and let them know you are ready to sign.
You may sign online with a secure e-document service, or you could go into a physical office. It depends on your lender and your personal preferences.
Last but not least, make on-time payments! You’re refinancing to improve your financial situation. Missing payments will only hurt it.
If you do end up having trouble making the payments, call your lender and explain your situation. They may be able to help you before you ever miss a bill.
What if I don’t qualify to refinance my car loan?
If your credit isn’t up to par, you may have trouble qualifying for a new auto loan. But that doesn’t mean it’s the end of the road.
Refinancing is when you replace an existing loan repayment plan with a new one. There are many reasons people do this, and whether it’s a beneficial or damaging move for you will depend on a multitude of factors.
We’re going to talk you through the pros and cons of refinancing a car, and the cost to your wallet and credit.
In This Guide:
Should I refinance my car?
Many people decide that refinancing their vehicle is of benefit, and we’ll start by taking a look at some of the reasons why.
With refinancing, you can free up extra cash which can have a significant impact on your life. A new loan plan where you pay out a little less each month can enable you to have a bit more disposable income for when life throws surprises – and throw it does. On the other hand, paying off your loan quicker with bigger instalments will enable you to access better interest rates, meaning you save money overall.
It’s not uncommon to refinance for debt management reasons – you may find income retained from a new plan helps with settling other bills and necessities.
Comparing car finance plans may show that there are better deals out there, especially if your credit score has improved. We’ll talk more about this later.
Interest rates can fluctuate, and it may be time to revisit your plan. The lower the rate the better, but not everyone can get their hands on the best deals. When you initially took out the loan the best rates may have been out of reach.
But if your disposable income increases – say if you’ve got a promotion or moved house – then you can make bigger payments and not only pay off your loan quicker, but also be eligible for better interest rates. Instead of stretching out your repayment plan, you could refinance to make bigger payments over a shorter period of time, saving you money.
How much does refinancing my car cost?
There’s no one-size-fits-all rule here. It will always depend on your specific plan and circumstances. If you’re extending your loan term then you’ll pay more over time, even if you’ve bagged yourself a better interest rate.
How does this work? Say you have a year left to pay off your car, but you want to extend it to two. Even with a lower rate, you’re paying interest for twice as long, so over time your repayment could add up to more.
However, the money you save month by month could benefit you in other ways – you might be saving for a house deposit, with that extra money being an invaluable contribution and getting you onto the ladder faster. Instead of feeling the immediate pinch, you just pay it back for longer. Alternatively, if you get a good deal, it could cost you less.
How will refinancing my car affect my credit score?
Struggling to keep up with payments will impact your credit score, and not in a good way. And as soon as you miss a repayment, the pool of lenders willing to help you might diminish. So to keep your credit score ogle-worthy, it’s better to ensure all payments are made on time – even if they’re smaller. You’re sticking to a plan.
If you’re strapped for cash, refinancing your car could be a great option. Small consistent payments over an extended period of time is better than unpredictable or bouncing payments.
Refinancing with a better credit score
On the flipside, your credit score may have improved since your original plan was arranged. You may have consistently made repayments on your vehicle whilst also improving your credit rating in other areas of life, such as with being approved for a mortgage or credit card.
Therefore, you may be able to access better interest rates than you were initially given now having proved you’re reliable. Why not try and get the best deal?
Do bear in mind, however, that over-checking your credit score can be detrimental as leasers see it as representative of the need to borrow money, rather than shopping around out of personal interest. Therefore, if you know it’s improved, don’t check a further ten times – go for it.
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Are you thinking about how to refinance a car loan? Refinancing a car loan is an excellent way to reduce monthly payments and increase the length of time you have to pay your loans.
Are you thinking about how to refinance a car loan? Refinancing a car loan is an excellent way to reduce monthly payments and increase the length of time you have to pay your loans. Refinancing a car loan is also an excellent option if you are considering selling your car. If you have a lot of equity in your vehicle, refinancing a car loan can help you with short-term cash flow problems. The process for how to refinance a car loan is not as complicated or lengthy as it may seem at first glance. Here are some tips that will help you with refinancing your car loan.
When it comes time to actually apply for your refinance, there are just a few simple steps that you will have to follow. These include collecting your necessary documents, doing some basic comparison shopping, selecting a lender, paying off your existing loan, and making payments to the new lender. While these are not difficult steps to follow, if you don’t have all the information upfront, it will be difficult to find the best rates and terms for how to refinance a car loan.
In order to get the best possible rates and terms on how to refinance a car loan, you should begin by getting a free quote from a number of lenders. This means obtaining quotes from at least three different lenders. It also means checking out what each lender’s loan requirements are and what their terms and conditions are. Lenders offer many terms and conditions on how to refinance a car loan. If you are not aware of what these terms and conditions are, make sure to shop around until you have found a good lender that offers good terms.
Once you have settled on a lender who offers good terms and rates, you will want to consult with a credit counselor in your area or online to help you through the refinancing process. A credit counselor will help you organize all of your financial information, such as showing you how to calculate your payment based on the amount of loan you have borrowed, your remaining term, and the interest rate. The credit counselor will also help you understand the different types of refinancing you can take part in, such as variable rate loans, fixed rate loans, and home equity loans. These are just a few of the options that you will be presented with during your consult. Because these experts have been handling refinancing situations for years, they will be able to provide you with valuable insight on how to refinance a car loan.
Another thing you should know about how to refinance a car loan is that auto refinancing makes sense when you consider how long it takes you to pay off your current loan. The longer it takes you to repay your auto loan, the more money you will be spending on interest. When you make your monthly payments, the amount of money you are paying will be reflected as interest on your auto loan. With a shorter term loan, you will be able to reduce the amount of time you spend paying back your loan.
If you are looking for a lender to work with, your best bet may be to look around online. There are many reputable lenders who do business online and may offer you better rates and terms than traditional lenders. Before deciding on a company to work with, you should check out the Better Business Bureau to see if there have been any complaints against the company in the past. You also need to keep in mind that each individual has their own credit scores and not everyone is going to have the same credit scores as you. Lenders will use your credit scores to determine how much money you are able to borrow.
If you are thinking about refinancing to lower your monthly payments or get lower interest rates, it is important that you do it in the right way. Some people are tempted to take out another loan to pay off the original loan before it expires. This is a bad idea because it can put you in a lot of trouble if you fall behind on the payments again. Not only are you getting more debt, but you are putting yourself into a worse situation financially. Instead, you could save yourself a lot of money by finding a better deal to begin with.
When you decide to refinance, you want to talk to your lender so that you know how to get the best results from the process. There are usually good deals available for those who are willing to look for them. You will also need to find out how long the term will be for the new loan. You will want to find out if the lender is requiring some sort of collateral in case you cannot pay the loan off within the allotted time period. This can help you to get the lowest monthly payments and it can lower your interest rate as well.