Everything You Need to Know
If you're looking to cut costs from your monthly budget, refinancing your vehicle loan is a great way to do it. By acquiring a new loan at a lower rate, you can reduce your monthly bills. This money can be spent on other necessities that you haven't been able to purchase because of a previous high-interest rate auto loan.
It's important to do your research before proceeding with this important financial decision. You need to choose a company that offers the lowest interest rates possible. myAutoloan.com makes this process quick and easy. You get to choose from up to four refinance loan offers, which best suits your needs and terms. You'll never be pressured to accept a loan offer, which allows you to research your options without an obligation to sign.
If you're ready to explore your auto refinance options now, visit our auto refinancing section to get started. You can receive offers for refinancing both new and used auto loans. If you aren't sure this is the right financial step for you, please keep reading.
We'll break down all the basics of car loan refinance, as well as offer some guidance that will help you make the most out of the process. Don’t take my word for it, check out what our thousands of customers experience by working with myAutoloan.com Online Auto Lending.
When is the Best Time to Refinance?
There are a few conditions that will set you up to receive the best offers on car refinance loans. For the most part, these conditions rely heavily on the economy.
For example, during the COVID-19 crisis, interest rates are lower than they have been in about 10 years. Even if you have a low credit score, it's the perfect time to lock-in a reduced rate. However, once the market recovers, rates might rise rapidly. If you don't act now, you could miss out on your chance to a lower monthly payment and a lower cost of financing.
Who Qualifies for Vehicle Refinance?
Here at myAutoloan, we believe the consumer should be in control. That is why we offer our free, fast, and easy car loan refinance applications to get you started. Upon completion, you'll receive offers from up to four real auto finance lenders.
Because we don't restrict our applications to only a few lenders, the application is sent to the top lenders throughout the full credit spectrum – that means almost anyone can apply for a vehicle refinance loan through our site. Of course, the number and quality of offers you receive will vary based on a few factors.
Your Credit Score
The number one consideration lenders look at is your credit score. According to the top three credit bureaus, you're most likely to receive a lower interest rate if your credit score has increased since your original loan. On time payments will definitely get you a better score and a better offer from lenders.
However, it is important to note that sometimes the market for interest rates does change on its own. As long as your credit hasn't dropped dramatically, it's possible that you'll still receive an offer with a lower rate. It all depends on how much incentive lenders feel they need to give consumers based on the current economy. Therefore, your timing is excellent.
Amount of Your Car Loan
Another important factor to consider when refinancing an auto loan is how much left you have to pay on the original one. Certain lenders require that you still owe a certain amount on your original loan. For example, some lenders set a minimum of $7,500 of loan balance to make you an offer. Note that with six months of on time payments, after receiving your original loan, your chances are very good that several offers will be coming for you to consider. It’s always nice to be able to save money!
Age of Your Car
Our lenders may also look at how old your vehicle is. Typically, cars older than seven years are considered used. These vehicles won't qualify for new car rates. But that’s no big deal. You’ve got choices too!
Therefore, if you purchased your car off a dealership’s lot, a refinanced used car loan might be the best thing because the chances of getting a lower offer on rates. This is because your original interest was probably marked up by the dealership – that’s what they do so don’t be afraid to try.
Once again, the market is a factor in all of this. Those with newer or older cars may still be able to get reduced rates from our lenders and will compete for your car loan with competitive interest rates. Lenders are always looking to acquire new customers.
How to Choose the Best Car Refinance Loan
Here at myAutoloan, you can choose from up to four competitive auto finance lender offers. While this gives you the freedom to set your own financial path, it can be difficult to decide which loan is best for you. Here are a few things you should consider when choosing a lender for refinancing your vehicle loan.
It may seem obvious, but let’s make this point clear - you don't want to choose a refinance option with an interest rate higher than your current one. That’s because you may end up with higher monthly payments.
While most people refinance for that purpose, you may simply want to reduce the length of your loan. In this case, make sure you don't choose an interest rate that will result in your paying more for your car by the time the loan is paid off.
You can use our handy calculators and tools to help you determine which loan will result in an overall better price for your vehicle.
Terms of the Loan
On the other end of the spectrum are loans with lower interest rates but longer terms. While a few extra months won't increase your final cost by much, a big jump in the amount of time you have to pay on your loan can be troublesome to your long-term finances.
However, this is a great way to reduce your monthly bills in the short term. If you have a reliable vehicle that you believe will be around for a few more years, then refinancing at a lower rate for a longer-term may be the solution you need.
How to Avoid Common Car Loan Refinance Mistakes
With an ample amount of technical language involved in any loan process, people are bound to make a few mistakes when refinancing an auto loan. Here are a few things to keep in mind while you're shopping for your next lender:
Check Your DTI (Debt to Income)
Because a lot of people that refinance their vehicles do so because of reduced income, lenders will also look at your debt to income ratio. If this number is high, you might want to research ways to reduce your DTI before applying for loans. This will help you avoid unwanted inquiries into your credit report before it is repaired enough for lower rates. Take a minute to review our guide to improving your credit score. You can pick up several hints of great value.
Because myAutoloan works with the best lenders from all across the country, you can rest assured that you're receiving the lowest possible rates. Use the free tools for interest rates and payment estimates. They are great tools and the competitive offers that you receive, there will be no added fees or charges to you because we are working with you to set up a direct to consumer finance loan. Also, the payment and interest rate tools that we provide really give you a sense of what you need to know before going to the dealership. If you choose not to use a tool such as ours, you need to make sure you shop around. The first offer you receive will most likely not be the lowest.
Make sure you research which lenders cater best to your range of credit scores, as well as the length and amount of your current auto loan. Choosing the wrong lender can easily deter you from a process that is designed to save you time and money.
With interest rates at an all-time low, there's never been a better time to explore new lenders. Additionally, refinancing your vehicle can reduce a lot of the financial stress most of the country is currently experiencing.
At myAutoloan, we believe the process should be quick, easy, and free. By filling out our refinance application, you can be immediately matched with up to four lenders. You'll receive some of the lowest offers on the market and have the freedom to choose the lender that best suits your needs. Fill out your application today!