back to articles | August 28, 2019 | Greg Thibodeau
Categories:   Refinance To Save    Loan Calculators & Rates    Types of Car Loans    The myAutoloan Difference
When to get an Auto Refinance Loan
You have no doubt heard of auto loan refinancing before. Or simply an auto refinance loan. The term “refinance” actually refers to a financial situation wherein a borrower finds financing to pay off an existing car loan. Refinance loans are most often used in home buying. In fact, refinancing is one of the most popular methods of getting less expensive financing for a home loan. The reason is that rates change and when you can refinance and save money, it’s a smart thing to do. This applies to auto refinancing as well.
With auto refinance, many borrowers have gotten a long at the dealership. Time passes and rates change and the possibility of saving thousands of dollars may exist. Auto refinance is basically paying off one loan with a new loan. The goal of auto refinance is to allow the borrower to save by reducing the monthly loan obligations. And as such, it is one of the best kept secrets in the financing industry that is so easy to obtain a free look and comparison of your current loan amount. For years now, people have refinancing their homes and saving thousands of dollars.
However, the practice of refinancing car loans has not been publicized or communicated as much. Why? Perhaps the reason is that auto loans generally behave differently from home loans and people are naturally skeptical about new methods of financing. Regardless, auto refinance is still a good choice, provided that you do a bit of checking out options. One option is to use a site that actually give you a choice between different loan offers. A site that shows you in a secure and confidential manner what other lenders would be willing to refinance your existing car loan for. A site like myAutoloan.com.
Auto Refinance Loan
If you obtained your auto loan from the dealership, chances are that you can save money by looking at a refinance loan. Interest rates fluctuate all that time and knowing that the dealer may have marked the APR a bit means that you might save by reducing the APR terms of the loan. Auto Lending Rates and Mortgage rates tend to move with interest rates. Therefore, as interest rates change so do the refinancing rates change. Changing finance rates typically mean all financing rates change as well and thus there is the opportunity to save with a reduced monthly payment. To check out how monthly rates can change use a rate calculator to get an idea of monthly payments with a new rate.
Only few people really understand the time value of money. Keep in mind that the longer you pay for a loan, the bigger amount of money you actually spend for it. Thus, by the end of the loan period, you could have paid more money on interest than on the principal. This is why auto refinance is important as it is one of the few methods that could help you minimize loan costs and maximize your savings.
Who can benefit from Auto Refinance?
Almost anyone with a loan to his name can benefit from auto refinance. Even car buyers with bad credit can obtain auto refinance as a way for them to lower the overall costs of a car loan.
Let’s say, for instance, you make an auto loan for $16,500 on a new Honda Accord. You don’t have very good credit because of a few rough roads in your journey. It happens – something bad things happen to good people. You decide to move forward and buy the car and you agree to make payments with an interest rate of 21% APR. Now you make on time payments for 4 to 6 months and your credit score improves and you look into getting an auto refinance loan.
If for example, you move forward and apply at myAutoloan.com and get up to 4 offers from credible lenders. Because your payments have been on time your ability and qualifications are attractive to the lenders, the offers vary in rate and payments. However, this time, you decide to accept a loan rate of 6% APR. Your current monthly payment is $446 which gives you total interest charges of $10,283 at the end of your loan period. Your auto refinance loan offers you a monthly payment of $319 with total interest charges of $2,639. Thus, by refinancing, you can save up to $7,600.
Whether you have bad or perfect credit the possibility of you saving money with a refinance auto loan is real. Check out your costs and look into a no obligation auto refinance loan today. Good luck and good hunting!