Car Loans » Car Refinancing

Is Refinancing A Car Loan A Good Idea?

admin — Thu, 16 Oct 2008 20:50:07 +0000

Did you know that refinancing a car loan can make your payments more affordable and save you money over the entire life of the loan? It’s true, however you need to make sure you do it right or refinancing a car loan could end up costing you more money.

There’s no doubt that buying a new car is an exciting and stressful time. Many people get overwhelmed by the whole thing and end up being talked into more car than they need by the salesman. They fail to focus on their own needs and end up with a high interest rate, a high monthly payment or both. If this has happened to you, there’s a way out and that’s through refinancing a car loan.

You interest rate will vary based on many variables from the dealer to the state your in to your credit score to the lender and many other things. I’ve heard reports of people getting car loans for as high as 19% APR which is insane! You might as well finance your car with a credit card at those high interest rates. Your rate can be higher or lower based on the amount your financing and the length of the loan as well, but the best way to lower your rates are to do some shopping to find the best car loan for you.

If you’re already paying a high interest rate on a car loan then you do have several options to lower that rate. The best way to do this is by refinancing a car loan. There are immediate benefits because your monthly payments are lowered, but there are also long term benefits because you end up paying less money in interest to the bank. You can literally save thousands of dollars over the life of the loan by refinancing.

Think of this; if you financed a $20,000 car loan at 11.9% you can reduce the interest rate by just 3% you save yourself $2200 over the life of the loan. Larger loans and larger interest rate deductions will of course mean larger savings and this is when you really benefit from refinancing a car loan. Remember too that you won’t be refinancing the total cost of the car loan, but just the balance due, so your monthly payments will be lower yet.

Now it gets even better, because not only can you lower the payments, but you can also shorten the length of the loan meaning your cars value will be higher when you finally pay the loan off. Cars depreciate quickly, so a years less wear on the car can put several thousand more dollars in your pocket when you trade the car in.

When you do go to refinance a car loan make sure you know how they are calculating the interest. You want to avoid a simple interest loan because in this case they will be charging you interest on a daily basis on the car loan. Find out too if you can pay the loan off early or if there is a prepayment penalty for early payoffs.

You can refinance a car loan no matter what your credit history is like so why not look into it. Even if you save just $15 a month it’s worth it because there are no points to pay on the loan like with a home refinancing. Chances are that you’ll be able to save much more than this when you refinance a car loan though.

Is It Worth the Trouble to Refinance My Car Loan?

admin — Thu, 25 Sep 2008 18:19:12 +0000

There are two situations where it could make sense to refinance my car loan. One is the bad situation where you can’t afford the monthly payments and are trying to avoid missing payments and ending up with a repossession. The second is the better situation where you simply want to take advantage of lower interest rates and lower your monthly payment.

In either situation the solution to refinance my car makes perfect sense. Just be sure to review the terms of the new loan to make sure it is actually to your benefit before going ahead with the refinancing.

Refinance my car – I can’t afford the payments

When you simply can’t make the monthly payments on your car loan anymore, refinancing may be the only way for you to avoid a repossession. Refinancing can lower your monthly payments in two ways, first by lowering the interest rate on the loan and secondly by extending the duration of the loan. By combining both you’ll get the greatest monthly savings.

Of course, you may already have poor credit and a bad credit score. This will keep you from being able to secure the lowest interest rate on your car loan and you’ll have to refinance at a higher rate. You can still lower your monthly payments though by extending the length of the loan.

If you’re in this situation you’ll want to take the time to research several lenders and find the best rate possible. Just because you have poor credit doesn’t mean you can’t find a better deal when you refinance my car. Get several quotes, compare the terms and rates and choose the best deal you can to lower your payments.

Refinance my car to lower the interest rate

If you’re just looking to take advantage of lower interest rates then you’ll have much more flexibility in finding and negotiating the best deal possible when you refinance my car. Chances are in this situation your credit score is good and finding a lender willing to offer you lower interest rates should be pretty easy.

Again you’ll want to get quotes from several lenders to find the best possible interest rate. You also want to make sure that your savings aren’t eaten up by excessive additional fees such as closing costs, administrative fees and other miscellaneous charges since this defeats the purpose of refinancing to save money in the first place.

No matter what your motivation is refinancing my car loan is a simple and quick process. You simply need to take the time to get the quotes and to pay attention to the terms being offered to you to ensure you get the best deal. Whether you’re trying to lower your interest rates to take advantage of current conditions or if you need to refinance to avoid a repossession, refinancing your car loan is a smart move.

Benefits and Requirements of Car Refinancing

admin — Thu, 25 Sep 2008 16:04:44 +0000

Even if your credit is poor it’s easy to qualify for auto refinancing. And refinancing your car can help you for several reasons. Best of all, thanks to the broad reach of the internet finding a lender to refinance for you is quick and easy as well. Here are some benefits and requirements of refinancing your auto.

Benefits of Auto Refinancing

There are several reasons that people have for refinancing their car loan. Naturally the top reason is to save money each month on their auto payments. When you refinance you can lower your monthly payment, get a better interest rate and either reduce or extend the duration of your loan.

Those who had bad credit when they bought their can and have since improved their credit score will benefit the most from car refinancing. With a better credit score you can expect much lower interest rates on your car loan. A drop of several percentage points on your loan can translate to thousands of dollars of savings over the life of the loan.

Auto Refinancing Requirements

While it would be great if you could refinance at any time, there are certain requirements that need to be met in order to qualify for car refinancing. First of all, the current value of your car has to be greater than the amount you still owe on the car loan. If you owe more than the car is worth this is called an upside down loan and lenders will not refinance this type of loan.

If you’re in this situation and want to refinance then you should do all you can to reduce the amount you owe on the car so the loan is no longer upside down. This will mean you will need to pay more than your monthly payment for some time.

Two additional requirements when refinancing an auto loan is that the car be less than 5 years old and that the new loan must be for not less than $7500.

How Does Car Refinancing Work?

Refinancing your auto loan is actually quite simple. First you’ll need to contact the current lender to request a payoff amount. Once you have this number you can go online to fill out an application for an auto refinancing quote. You’ll be asked for the details of the car, like the make, model and year, any extras like security systems or audio enhancements. You’ll provide them with the payoff amount for the loan and may even be required to provide them with the VIN. When you apply online for an auto refinance the approval process is instant.

Selecting an Auto Refinance Lender

When choosing a lender for your auto refinance don’t just go with the first offer you receive. Car refinancing is actually quite competitive and if you take the time to get several quotes you may save yourself even more money. Request quotes from at least 3 lenders and take the time to compare the rates and terms of each offer. Then make your decision based on the company that will get your refinancing with the lowest cost to you.

When Car Refinancing Makes Sense

admin — Thu, 18 Sep 2008 18:24:45 +0000

If you want to save some money each month then you should consider car refinancing. Maybe you didn’t know that you could refinance a car the same way you refinance a home, but you can. And if you do it correctly there are no points or fees and you can save a bundle of money over the life of the loan.

It happens to so many of us when we go car shopping that the excitement of getting into that new car takes over and our emotions end up putting us into a car and monthly car payment that’s more expensive than we planned for. Instead of focusing on saving money and getting a cheap car loan we focus on the excitement and emotional boost that we get from a new car purchase.

Interest rates will vary depending on your lender of course, but some people end up with rates in the high teens which is crazy, even if you’re financing a car with bad credit. There are simple ways to keep your interest rate down, the most important of which is to take the time to compare rates from several auto lenders. You’ll also find that the length of the loan, the amount of the loan and your credit score will have an impact on your loan interest rate.

Once you’re into the new car you do have some options to lower your interest rate and monthly payments. Car refinancing can drop the interest rate by several percentage points and save you thousands of dollars over the life of your loan. And of course you’ll have lower monthly payments which will be a help to your budget.

Think of this, a car loan for 20,000 financed for 60 months at 12.5% will cost you $449.96 a month and $6997.53 in interest alone over the 60 months of the loan. If you refinance the car loan at a much lower rate of 6.99% your monthly payment will drop by over $50 and you’ll save over $3200 in interest. Pretty good reason to look into car refinancing isn’t it? Plus you’re payments are likely to be even lower than that since you’ll be refinancing less than the original $20,000 because you’ve already been making payments on the loan.

The usual financing rate for a new car with good credit is 7.99%, but you can find lower rates on a refinancing because the loan amounts are smaller and the duration is shorter. And you’ll be able to shop around so you could find an excellent interest rate. Car refinancing is certainly easier online and it’s less stressful than the initial purchase finance at the dealership.

You’ll also want to consider the full terms of the loan. Is it possible to repay the loan early in full or will you incur a fee for doing this? Make sure you read the fine print when you’re getting quotes for an auto refinance. You should also know that you can refinance your car even if you have bad credit. You may get an interest rate that’s a bit higher than you would get with good credit, but it should still be lower than the current interest rate, especially if you had bad credit when you initially bought the car.

Car refinancing is just a good financial move. Anytime you can lower your interest rate and save yourself money you should take the opportunity to do so. Even $20 a month can make a difference and you’ll then be able to use that money for something else.