Category: Car Loans

A Guide to Refinancing Your Car Loan

If you want to refinance your auto loan, it is important that you know exactly how to go about doing it. There is a very specific procedure that you should follow when it comes to refinancing an auto loan, and you will definitely want to know what it is. The more time you take to get this information, the better off you will be in the end. The last thing you want is to make some simple mistakes that you will regret later on.

Get all of the necessary documents together

The very first thing that you will need to do when it comes to refinancing your auto loan is to gather all of the necessary information, including:

Your driver’s license
The vehicle identification number or VIN of your car
Pay stubs from your current employer or some proof of employment

Your social security number

Make sure that you get your original loan contract and verify that there are no prepayment penalties. If you cannot locate your contract, you can always contact the lender’s customer service department and they will provide you with the details you need.

Take a look at your credit history

You will also need to take a close look at your credit history to make sure that there aren’t any mistakes or errors on it. A lot of people who check their credit reports are surprised to see that there are multiple items on it that shouldn’t even be there. You can potentially improve your credit score by catching these mistakes. Since your credit will play an important role in refinancing your auto loan, you will definitely need to make a point of taking a close look at it. You will have to pay to get a copy of your credit report, but it’s well worth the minor expense.

Submit an application

Next you will need to go online and fill out an application to refinance your auto loan. This process shouldn’t take very long and is very simple. Make sure that you submit only accurate information so that your application will be processed as quickly and smoothly as possible. Applying won’t cost you anything and you will be able to do it from home as long as you have a computer and internet connection.

Do the Math

You should make a point of using an online loan calculator (which you can find on the lender’s website) so you can figure out what your new loan payment is going to be. Ideally your new loan payment will be significantly lower than it was before. There are a lot of different loan calculators that you can use online, but your lender should have one on their website.

Decide if refinancing really makes sense

Refinancing an auto loan can be a very good decision for some people but not everyone. It is important that you take the time to think about it and consider things from every angle before proceeding. Not everyone with an auto loan can benefit by refinancing it, so you will need to keep this in mind. Depending on your specific situation though, you may be able to save yourself quite a bit of money in the long term.

Look over the terms of your loan

If you do in fact decide to refinance, you will be able to leave the length of your loan unchanged or do one of the following:
Pay off your loan faster. If you are accustomed to making loan payments of a certain amount, you could keep the payment almost the same but reduce the overall length of the loan.

Take more time to pay off your loan. If you are on a tight budget, this is definitely an option that is worth considering.

Final Thoughts

Refinancing one’s auto loan can be very helpful, but there are a lot of things to consider before actually going through with it. If you are struggling to make regular minimum payments on your loan, refinancing could significantly reduce the amount that you have to pay each month. This is an option that is definitely worth exploring because of how beneficial it can be.

Top Tips for getting a great deal on an Auto Loan

If you are currently in the market for an auto loan, you will certainly want to make a point of learning all the helpful tips you can. These tips will help you to save a significant amount of money on your auto loan. The fact is that most people pay far too much for these loans, so you will therefore need to make sure that you do everything you can to avoid getting ripped off. Those who take the time to get this very valuable information will end up with a great deal on the car loan they need.

Find a Reputable Lender

It is crucial that you find a reputable lender to borrow from, because otherwise you are going to regret it later on. There are lots of different places that you can go for an auto loan, but you don’t want to trust just anyone. You must keep in mind that the lender you choose will determine a number of things, including the interest rate you pay as well as other important terms. The more time you spend looking for the right lender, the better off you are going to be in the long term.

Don’t shop for a loan for more than two weeks

You should also keep in mind that your credit score is going to take it a small hit every single time you apply for an auto loan, so you will want to limit the number of applications you submit. Don’t take more than two weeks to shop around for the best loan, because it could damage your credit in a very significant way.

Get familiar with your credit history

The fact is that your credit is going to play a major role in whether or not you get approved for an auto loan as well as what your interest rate will be, so you’ll need to get familiar with it quick. Most people don’t even know what their own credit is like, but you will need to make a point of checking yours. While you may have to pay a small fee to get a copy of your credit reports, it is well worth it. Make sure that you look for any mistakes or errors on your credit report, as there are sometimes things that shouldn’t be there. By doing this you could potentially increase your credit score!

Compare the total loan amount when shopping around

When you are shopping around for the very best deal on an auto loan, it is important that you compare apples to apples, meaning the full loan amount and not just the monthly payment. This will give you a much better idea as to which loan you should take. Those who only compare monthly payment amounts usually end up regretting it very quickly.

Never assume the best

You never want to make the mistake of assuming the best when it comes to what your interest rate is going to be like, because you could be in for a rude awakening. Always assume a worst case scenario so you are at least prepared. If you let the lender know that you are shopping around or have already found another offer, you are far more likely to get a better rate.

Use an online calculator

If you are wondering whether ultra-low dealer financing or cash rebates are the way to go, you will want to use Bankrate’s car rebate vs. low-interest calculator to your advantage. This tool will help you figure out which is the better deal right down to the very last penny.

Final Thoughts

Getting an auto loan requires quite a bit of research, and it’s incredibly important that you do it before wrapping everything up. You definitely don’t want to rush into this sort of loan, but rather take the time to get all of the necessary information to make an informed choice. Those who shop around for the best loan deal will get precisely that. Make sure that you find a reputable and trustworthy lender that you can depend on to provide you with the money you need for a new car with minimal strings attached.