If you're paying too much on your existing auto loan, an auto loan may be the solution. But, is auto refinancing right for you? Ask yourself three basic questions:
1.Did you obtain the original rate from your dealer who, at the time, offered auto loans?
2.Is it possible that another lender, possibly a bank, may have offered a lower rate on your auto loan?
3.Are you interested in increasing the equity of your car, reversing the "upside-down" trend of your car's value depreciating faster than you pay off the auto loan?
If you answered 'Yes' to any of the questions above, then auto refinancing may make a lot of sense. And cents. With auto loans, consumers everywhere are literally saving thousands of dollars over their loan terms. Consider this example:
You borrow $20,000 at a rate of 13.4% over a period of 5 years, and then after four months to a new, lower rate of 9.1%. You save $2,350 over the remainder of the auto loan term.
If you financed your car at a dealership, you probably paid an interest surcharge called Rate Participation. Dealers who offer auto loans will generally make money on the interest you're charged by marking up the rate lenders provide. Sometimes this rate hike can be 3% greater than what a bank would have quoted you otherwise. In these cases, your current credit rating already qualifies you for a lower auto loan rate, one that would have equated to lower monthly payments.
Fortunately, auto loans involve a simple application, and can be completed online in a matter of minutes. This is followed by a phone call from a loan agent who verifies your auto application and gets you a credit decision. The new lender then simply pays off your old auto loan, and opens your new auto loan at a reduced rate and payment. In the meantime, you'll receive some paperwork via post mail for your signature. The best auto loans have no application fee, pre-payment penalties or hidden charges – what is commonly referred to as “no-obligation”.
But the financial world is not easy to navigate and obtaining the right auto loan can be difficult. The easiest way to find companies offering the best auto loans (and service) is to utilize the Internet. Look for sites that offer vast resources, including advice, tips, and general information about financing, as well as tools that make auto refinancing easy. These companies are usually the most qualified to meet all your unique financial needs.
Like your need to save money. Or, at least, to stop spending it where it doesn't have to be spent. Auto is a great way to do that, and the checklist below can help. You’ll not only save money, you’ll save time, something just as valuable as your cash. In just a few minutes, you’ll learn how to save hundreds – possibly thousands – of dollars over the life of your auto loan. If have a high APR and want to lower your payments, this is an oversimplified process to do it.
Auto loans can be broken down into five easy steps:
Step One – Begin with the auto application
A typical auto refinancing online application is short, easy to fill out, and only takes a few minutes. Never fill out an application that isn’t advertised as “secure.” This will ensure that the information you submit is protected.
In most cases, if you submit your auto application during regular business
hours, a designated auto refinancing loan specialist will contact you with a decision promptly. However, if it is submitted at any other time, for example on the weekend, it may take a slightly longer before you hear back.
Step Two – The nuts and bolts of auto refinancing
Once your auto loan application is approved, have the following information readily available:
•Name(s) on auto loan
•Name(s) on car title
•Year, Make, Model, Class
•VIN#
•Exact Mileage
•Current Lien Holder
•Account Number
•Lien Holder Phone #
•Additional equipment in the vehicle (Auto terms are affected by factors such as transmission type, 2/4-door, short/long-bed, CD player/changer, running boards, cruise control, power windows/door locks/mirrors/seats, rack, tilt wheel, etc.)
Step Three – Speeding the auto process up
To expedite the auto refinancing process, have a copy of your driver's license, 3 personal references, car insurance, car registration, and/or original lease contract (if applicable), ready to fax to the auto refinancing loan specialist.
Step Four – Signing your auto contract
Then, after speaking with a specialist, you'll be sent documents that must be returned with your signature. Once these documents are received by the lender, a payoff check will be sent to your existing lien holder.
Step Five – Closing the auto deal
Finally, once the check clears and title is received, the auto process is complete.
Auto allows you to keep the car you love and get rid of the payments you don’t. Just follow these five steps to a better auto loan. So, start saving money, or lower your payments now.
