- Auto refinancing explained and how it saves you money.
- Why you should consider refinancing even if you have a low APR.
- Reviews of sites with low rates.
- How to check your credit and score before refinancing a loan.
- Steps to increase the chances on getting loan approval.
- How to get out of paying 21% APR to 25% APR even if you have bad credit.
What is Auto Refinancing?
It is one of the best kept secrets around for saving you money, but most people never think about it. You pay off your current car loan with a refinance loan from a different lender that has a lower APR.
How You Benefit
You lower your monthly payments and your interest rate drops. This can save you thousands and can allow you to pay off your car even quicker. It's just like finding money in your pockets after doing the laundry. Use the cash that you saved to pay off other debt.
Note: Most lenders will not refinance their own auto loans so you will need to apply with a different one.
Who Should Refinance a Car Loan?
I like to use the 1% rule. After you buy your car, start watching the interest rates at refinance sites we recommend like Capital One Auto Finance, CARCHEX or LightStream and see if you can find a rate at least 1% less than your current rate. Use the calculators on their sites to see how much you will save. You'll be astounded at how much money you just found.
Steps to ensure a speedy auto refinance loan approval
These are important points, so pay close attention. You would hate to get rejected for making a silly clerical error.
- Applications need to be in the same names with exact same spelling as the names on your current auto loan
- Have your car loan account number handy
- You must refinance more than $7,500 - any less and it's not worth the lender's time
- Have vehicle's proper information - including the car's year, make, model and VIN found on your dashboard or registration.
- You will not be able to borrow more than the value of the car