back to articles | August 30, 2019 | Dale Peterson
Car Refi Loans: Lower Payments and Interest
If you borrow money to pay off your existing car loan, you acquire a car refinance loan. Although similar to a mortgage refinance, the process is quicker and easier. When you refinance, your new lender pays off your old loan, and ownership transfers to the new lender. The reason to refinance a vehicle is to reduce interest costs, lower monthly payments or both.
If you want to reduce the total interest you pay, you may not want to either keep the terms the same or reduce the term. However, if your intention is to make smaller monthly payments, you will need to extend the terms of your loan. Keep in mind that extending the terms will increase the amount of interest you will pay.
If your existing lender has any prepayment penalty fees, be sure to factor these costs into your refinancing decision. What at first appears to be savings may not be such a good idea after all. State registration and lien holder fees vary from state to state, but generally do not amount to a great deal of money. However, know what they are and take them into consideration as well.
Currently, because interest rates have dropped substantially, car refinance has become increasingly more popular. How much you save will depend on the balance remaining on your current loan and the difference between your old and new interest rates.
Before refinancing your auto loan, be sure to run a credit check. You can run a TransUnion free credit report at the myAutoloan.com website. Needless to say, your credit history will impact on the interest rate lenders will offer. If there are any errors in the report, be sure to have them corrected.
If you have a high credit score, but a lot of old accounts that you no longer use, be sure to close out these old accounts before applying to refinance your car. Some lenders will view an individual with a great many charge accounts in a higher risk category, and will therefore offer a higher interest rate. Your previous car loan definitely increases your chances of being offered an excellent interest rate.
Make sure your refinance loan application uses the same names as your current car loan, and have your account number ready. Generally, to refinance you need to have at least $7,500 left on your current loan. You will also need the year, model and 17 digit Vehicle Identification Number.
You should check the value of your car before beginning the refinancing process to ensure it has kept its value in relationship to what you still own. Your new lender will not loan you more than what the car is worth.
The online auto refinance application at myAutoloan.com is simple to complete. DigiCert SSL encryption ensures the information you submit is secure. The application form takes between three and five minutes to complete.
Since 2004, myAutoloan.com has consistently had an A+ rating with the Better Business Bureau. For seven years the company has provided loans in 48 states and serviced over 1.5 million customers. If you are considering a car refinance loan, now is the time to visit myAutoloan.com.