back to articles | August 09, 2022 | Dale Peterson
Categories:   Auto Loans & Financing    Refinance To Save
Is Auto Refinancing a Good Option for You?
This type of loan offer allows you to refinance an expensive or high-interest rate auto loan. For many years auto loan experts have written numerous articles to explain how this process works and how you can use it to save hundreds or even thousands of dollars on your car. Take a minute to see if this is something that you should consider.
How it works – The auto refinancing process is a lot like the mortgage refinance process, but it does not have the costs and fees normally associated with the mortgage process. Basically, you obtain a new car loan at a lower rate to replace your first loan. Ten years ago, auto refinancing was rare. They were available but just not much was known about them. Now that interest rates are starting to rise and we could be on the verge of a recession, auto refinancing has become increasingly popular.
If you financed your auto with your dealership, you have a marked-up auto loan. If you decide that you want to investigate an auto refinance loan, consider letting myAutoloan.com assist you in the process. You could save some money and it costs nothing to see if you can get a better rate or a better term length. It’s fast, easy, and there are no fees or costs to see if you can lower your payments or reduce the APR on your auto loan. Apply for a no-obligation, no-fee auto refinance quote online to see how current rates might save you some money.
How much can you save – Refinancing can save you a lot of money. Let’s say if you can refinance your auto loan and your payments can be reduced from $500 to $400, it speaks for itself. If you can refinance a loan payment to $400 a month, you could save up to $3,000 over the life of the loan! The higher your current loan rates are, the greater the possibility you can save by refinancing. Many of our national lenders offer auto refinancing rates that have competitive APR. Of course, it always depends on your current credit rating at the bureaus. But it costs you nothing to find out and it has no effect on your credit rating.
Who should refinance – Any individual who has an expensive auto loan or who wants to reduce their monthly payments or lower their rates should consider auto refinancing. Consumers with expensive loans from a car dealer can almost always save big by refinancing with a lower rate from myAutoloans’ list of national lenders. If your credit scores have improved significantly since your original car purchase, you should be able to reduce your rates which will save you money in the long run.
What are the requirements – Not all auto loans will qualify for refinancing. Since most lenders require you to have at least $7,500 due on your current loan in order to refinance, you might want to recheck and look at your balance. There are also common restrictions on the age of the car and the car’s mileage. Generally, that means that if you have less than 70,000 miles and the car is less than 6 years old, you should have no problem getting an offer. Plus, you may need to have a credit score say 525 or so to qualify for a competitive refinance rate. The good news is that if you’ve done a good job of making payments on your loan and any credit card balances, your credit score is certainly gone up.
What are the dangers – While auto refinancing can help you save a lot of money in some situations, it may not always be a good decision. If you are thinking about refinancing, be sure to evaluate if it is really going to help you out because of payment reductions or APR decreases. Check this finance guide for suggestions and advice as you do your research. You might also find the guide to Improving your credit as a helpful tool as well. Just don’t kid yourself before you really take a good look and make sure that it’s a smart thing to do.
By that I mean just be aware that a refinance loan may extend the term of your car loan in order to reduce your monthly payments. This could result in increased costs over the life of your loan but if you need some added income to cover your expenses, this would certainly help. So again, I’m just trying to make sure you are thinking this through so that it’s to your advantage, based upon your circumstances. For most people, it’s a no-brainer – if you can save some cash, just do it!
Refinancing allows borrowers more flexibility and freedom with their auto loans and with the cash that they save. People with expensive auto loans are no longer stuck with them for the life of the loan. Use an auto loan refinance opportunity wisely and it’s clearly to your advantage! Find out today if an auto refinancing loan can help you save money and let us help you see just how easy it can be. We would love to show you what we can do.
As interest rates rise, most banks continue to relax credit standards on consumer loans, per Kiplinger Reports. Banks have lowered credit scores or increased credit limits for credit cards and auto loans so there is certainly an opportunity for you to save money. They’ve also continued to ease lending standards across nearly all the real estate categories, and delinquency rates remain low across the board. So now is a good time to check things out. Be smart, do your homework and chances are you will be glad that you did. Good luck and good hunting!