Does Vehicle Refinance Require an Appraisal?

So how much are we really talking about here? For example, let’s say you bought a new car in the summer of 2008.  Just for this example, let’s say there were a few blips on your credit report that lowered your score and so the dealer told you that your auto loan would be 11 percent on a 60 month loan for a $24,000 car. Your monthly payments are $500.

Now let’s say that you look for a car loan refinance and you find an actual finance company that will do the application and approval process all online.  There are big differences in licensed finance companies and websites that promise to refinance and just sell off your information.  But that’s another story, for now, you have determined that the website is legitimate and actually works for you to get you refinanced.  That’s great because, as we identified earlier, rates are now at the lowest point in years.  If you want to lower your payments, do another 60 month loan.
 
If you want to lower the overall cost of the loan, refinance the balance that you owe on the car and do so in the fewest amount of months that you can, as long as you can handle the monthly payments. You could refinance the balance of your car loan and lower your payments to about $350 a month. 

How?  Because ideally, you have not only improved your credit, but you have been offered a very competitive interest rate and that could translate into a savings of nearly $6,000 over the life of the loan.

We could run a number of scenarios but one quick way to check out rates and payments is to use an auto refinance calculator to estimate payments and loan costs.  Other examples could well be more dramatic. In some cases, a new-car buyer could wind up with an auto loan based on an 18-percent interest rate. By refinancing at a competitive rate, the monthly payments would be slashed, and all it takes is about 10 minutes to fill out the application.

Regardless, you could save some cash by investigating the possibility of an auto refinance loan and get the New Year off to a great start.  Good luck and good financing.

You have probably heard of auto refinance before. Or simply refinance. The term “refinance” actually refers to a financial situation wherein a borrower finds financing to pay off a current loan.  It’s really pretty simple and not difficult at all to accomplish.  Auto refinance is done less often than it is in the real estate market, specifically with home ownership.  In fact, refinancing is one of the most popular methods of getting financing for a home loan.

With auto refinance, the same thing applies. Auto refinance is basically paying off one loan with a new loan. The goal of auto refinance is to allow you, the borrower, to save some money from your monthly loan obligations.  That can be in reduced monthly payments and/or in reduced interest APR that also helps lower the monthly payment.  And as such, it is one of the best kept secrets in the financing industry.  For years now, people have refinancing their homes and saving thousands of dollars when rates go lower. However, the practice of refinancing car loans has not quite been at the level of home refinance, but it has clearly gain popularity with interest rates having been lowered to 25 year lows.
 
One thing that is so often overlooked is that if you have improved your credit over say, six months, you can actually get a lower interest rate than when you purchased your car.  This is almost always true if you’ve had a few late payments in years past but have been on time and have taken control of your credit lately.  Why don’t more people know this?  Perhaps the reason is most people don’t know that since an auto loan has so much less paperwork associated with it, compared to home loans, they are naturally skeptical about how simple they are.  Regardless, auto refinance is still a good choice for many people, provided that the situation is right, you’ve done your home work and you are serious about keeping your credit in good shape.

When to get an Auto Refinance Loan
The way for an auto refinance loan to benefit you is if you can get it when the interest rates are lower than when you originally made the purchase.  This is true for auto and for Mortgage rates.  Rates tend to move up and during economic challenged times, they move lower. Therefore, since interest rates are low, then it’s likely that auto loan rates are low also.  Low auto loan rates typically mean lower monthly repayments can be obtained and that you can save money in the long run by reducing the APR on the loan.
 
Only few people really understand the time value of money.  In other words, you need to keep in mind that the longer you pay for a loan, the bigger amount of money you actually spend for it.  It simply costs your more of your cash to pay for the loan.  Thus, in some poor credit situations, by the time you get the loan paid off, you could have paid more money on interest than on the principal.  Just make sure you take control of the situation and don’t allow that to happen.  This is why auto refinance is important for 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 an auto 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 down their APRs.  Let’s say, for instance, you make an auto refinance loan for $16,500 on a new Honda Accord.  At the end of six months, you agree to pay off the amount at 21% APR. So for a few months, while you might be working on getting your credit back in shape with on time payment and reducing your overall debt,  your monthly loan payment will be $446.

After say 4 months, you decide to apply for an auto refinance loan.  However, this time, your loan rate is at 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.  Yes, it really is possible.  Apply now to find out if you can benefit from an auto refinance loan.

How it works – The auto refinancing process is similar to the mortgage refinance process, but it does not have the costs and fees normally associated with the mortgage process. Basically, you obtain a new car loan at a lower rate to replace your first loan.  Ten years ago, auto refinancing was pretty rare.  They were available but just not much was known about them.  Now that interest rates have dropped dramatically and we continue to sit in this recession, auto refinancing has become increasingly popular. If you decide that you want an auto refinance loan, consider letting myAutoloan.com assist you in the process.  It’s fast, easy and there are no fees or costs to see if you can lower your payments or reduce the APR% on your auto loan. Apply for a no obligation, no fee auto refinance quote online to see how current rates might save you some money.

How much can you save – Refinancing can save you a lot of money, if you play your cards right. For example, if you currently have an auto loan for $23,000 at 11% APR for 5 years, you’ll pay $500 a month. If you can refinance this loan payment to $400 a month, you can save $6,000 over the life of the loan! The higher your current loan rates are, the more you can save by refinancing. Many of our lenders offer auto refinancing rates around  4.75% -6% APR.  Of course, it always depends on your current credit rating at the bureaus.

Who should refinance – Any individual who have an expensive auto loan or who wants to reduce their monthly payments, or lower their rates should consider auto refinancing.  Consumers with expensive loans from a car dealer can save big by refinancing with a lower rate from myAutoloan.  If your credit scores have improved significantly since your original car purchase, you should be able to reduce your rates which will save you money in the long run.

What are the requirements – Not all auto loans will qualify for refinancing. Since most lenders require you to have at least $7,500 due on your current loan in order to refinance, you might want to recheck and take a look at your balance.  There are also common restrictions on the age of the car and the car’s mileage.  Generally that means that if you have less than 70,000 miles and the car is less than 6 years old, you should have no problem getting an offer.  Plus, you may need to have a credit score say 525+ or so to qualify for a competitive refinance rate.

What are the dangers – While auto refinancing can help you save a lot of money in some situations, it may not always be a good decision. If you are thinking about refinancing, be sure to evaluate if it is really going to help you out because of payment reductions or APR % decreases.  Just don’t kid yourself before you really take a good look and make sure that it’s a smart thing to do.  By that I mean just be aware that a refinance loan may extend the term of your car loan in order to reduce your monthly payments. This could result in increased costs over the life of your loan.  So again, I’m just trying to make sure you are thinking this through so that it’s to your advantage, based upon your circumstances.  For most people, it’s a no brainer – if you can save some cash, just do it!

Refinancing allows borrowers more flexibility and freedom with their auto loans and with the cash that they save. People with expensive auto loans are no longer stuck with them for the life of the loan. Use them wisely and it’s clearly to your advantage! Find out today if an auto refinancing loan can help you save money and let us help you see just how easy it can be.  We would love to show you what we can do.

Refinancing your car loan is an ideal way to lower your overall interest cost or reduce your monthly payments.  If you get lucky, you can do both.  By using an online multi-lender auto loan finance company, you can be assured that you are finding the lowest rate.  To be sure you are getting the best offer; follow these three tips before you refinance your vehicle.

1. Know Your Goal

Before you refinance your auto loan, decide what your goal is. Do you want a reduced interest payment or have a smaller monthly payment? With your goal in mind, you can choose terms that will best meet your needs. To find reduced interest payments, it is best to have improved your credit rating. One easy way to do this it to pay your credit cards down to 50% of their limit. You can also find lower interest rates by choosing a loan shorter than the typical five year period. Regardless of what you are looking for, it does not hurt your credit score to look and apply for an auto refinance loan.

Remember, smart people shop and the credit bureaus score it as only 1 inquiry, within a two week period.  To reduce your monthly payments, look for a loan for a longer period.  You don’t even have to find lower interest rates to lower your monthly payment. However, you will be paying more in interest payments over the course of your loan.  Just review your options and make a good choice for you, and know what you want to accomplish on the short term.

2. Go Online But be Prepared

To speed through the refinance process, gather all your financial information, for the auto you want to refinance, such as lender, monthly payments amounts, estimated payoff amount and current rate.  It’s not critical that you have the VIN number or exact APR’s or amounts, but if that info is handy, have it ready and with you as you apply.

If you don’t know the current balance on your loan, you can call your current lender to get the exact amount.  Having a copy of your last tax forms will also make filling out the forms for quotes or a loan application easy.

3. Compare Quotes – Get your Refinance Auto Loan

When you are ready to find an auto loan, compare quotes before you pick a lender. You can get quotes from online lenders from our site – all you need to do is apply.  What we do is match your application up with our lender base and electronically post lender approval information on our site.  It is secure and completely private so that you are the only one that can see the information.  Getting multiple offers is important to you so that you can have a choice and pick the offer that is best for you. Your Loan – Your Way.

Not a bad approach, right?  You don’t want to get locked into a deal that you can’t pay early.  While rates and terms are important to compare, you also be aware that there are no fees for applying or using us for your auto loan. Select the rate that works for you and take it from there.

After a small amount of paperwork, you can have your new lender pay off the old one and you are on your way to saving some money.  Good luck and let us know if you have questions.

Getting a new car loan? Now is the time to also check on insurance rates for your new car. Get a very competitive quote for car insurance available, as you do your research for auto financing, at BestCarInsurance.com.

myAutoloan.com’s used car loan rate for cars purchased at a franchise dealer is currently being advertised at 6.74 percent for car loans up to 36 months and the auto loan rate is 6.94 percent for loans between 37 months and 60 months.

Used car loans for purchasing an auto from a private party loan is a lot higher than purchasing from a franchised dealer. The current rate of loans up to 36 months is 7.19 percent and 7.79 percent for auto loans between 37 months and 60 months.

Rates for doing an auto refinance are at 4.75 percent for auto loans up to 36 months and 5.64 percent for car loans between 37 months and 60 months.  Leased buyout loans, buying your leased auto and financing the purchase, are at 8.08 percent for car loans up to 36 months and 8.45 percent for car loans between 37 months and 60 months.

See all the rates available by going to myAutoloan.com’s home page – rate chart is there.

Answers to frequently asked questions about refinancing an auto loan.
Q: What is an auto refinance loan?
An auto refinance is a loan that pays off your existing auto loan, similar to a mortgage refinance, but with a much simpler and faster process.  You don’t have all the paperwork, detail, downtime with specialists and appraisers so you can complete the process within days of submitting an application.

Q: How does it work?
It’s very simple. Your new lender pays off your old loan and the title to your vehicle is transferred to your new lender.  You now have a new loan and lender that you begin making payments to.

Q: Why should I refinance my existing auto loan?
Typically, consumers refinance to get a lower interest rate in order to reduce their interest costs, or to lower their monthly payments.  Auto refinance loan rates are at very low historical levels, so our customers are increasingly taking advantage of this by refinancing.  Chances are that your interest rate, even with great credit is higher than what is available today.  Make sure you know that higher interest rates are more expensive and will cost you more over the same time period.   You will be surprised at how simple and easy an auto refinance loan can be.

Q: When should I refinance my existing auto loan?
As with any personal finance decision, it really depends on your individual goals and what you want to accomplish.  It’s different for everyone but the objectives are pretty much the same.  If your goal is to reduce the amount you are paying in interest, you may want to consider an auto refinance loan with the same or reduced term as your existing loan. If your goal is a smaller payment, you may want to consider extending the term remaining on your existing loan, although this may increase the total interest paid over the life of your loans it will give you a cushion in which to work on the short term.

Q: Are there any fees associated with an auto refinance loan?
Typically, the only fees associated with an auto refinance loan are fairly standard transfer of lien holder fees which are usually $4 to $9 and, in some cases, a state re-registration fee of $10 to $70. These estimated fees may vary by lender, state of residence, etc. Be sure to check if your existing lender has any pre-payment fees.  Most do not but it does not hurt to check before hand. This could factor in to your decision to refinance.

Q: How much will I save by refinancing my existing auto loan?
How much you save depends on things such as the remaining balance of your existing loan, the difference between your old interest rate and the new interest rate, the term of your new loan, etc.

Q: Are auto refinance loans growing in popularity?
Yes.  We’ve seen a substantial increase in applications here at myAutoloan.com and the trend continues into this quarter.  Since auto loan interest rates have been at historically low levels, an increasing number of consumers are choosing to refinance their existing auto loans.

Q: What do I need to do to apply for an auto refinance loan through myAutoloan.com?
Simply complete an auto refinance loan request. You’ll typically receive a response within hours, and if approved, you may receive up to four offers from competing lenders. If you’re approved and you accept one of the offers, the lender will take care of the auto refinance process for you.

There you have it – short, sweet and to the point. Hope this helps in your planning and best of luck to all as we push the economy forward.

“As we have discussed before, there are a lot of auto buyers that pay more than they have to pay because they need a car,” says Heather Dietel, Director of Business Development at myAutoloan.com, a licensed auto loan refinancing lender. “If they just had to have transportation and purchased a car with higher rates at the time, they will absolutely be surprised at how much they can save.”  There are a lot of good reasons to consider doing an auto refinance loan so let’s highlight a few of them.

Benefits of Auto Loan Refinancing
The most obvious benefit of refinancing your car loan is to save money on the interest you’re paying. You can also shorten the terms of your loan or reduce your monthly payments. One great benefit of refinancing is to improve your credit.  “When you refinance, it will show up as a car loan that was paid-off in full and on time on your credit report,” Dietel explains. “The new lender pays off your current loan and even though you’re taking out a new loan with the new lender, it will help your credit score.”  Remember to keep your auto refinance loan applications to a one to two-week time period so it won’t negatively affect your credit score.

Whether refinancing will lower your current car loan rate by 10% or 1%, you will still save money, Heather says. On average, consumers can save $60 a month on their car payments and get a 3.8% rate reduction, she says.  “Even if you only get your interest rate dropped 1%, you’ll still lower your monthly auto payment and save hundreds of dollars over the course of your auto loan,” she says. “With that, you can either pay off your loan faster, or invest that money in getting rid of other debt. Remember, the way to get the lowest interest rate and save the most money is to make the auto refinance loan term equal to or shorter than the old loan.”
 
Examples of how much you can save by refinancing:
 
Loan amount:           $30,000
                                 Original loan                      New loan
term:                        60 months                        60 months
interest rate:             12.5%                              7.5%
payment:                  $675                                 $601

monthly savings:  $      74
total savings:         $4,429
 
Loan amount:           $20,000
                                 Original loan                      New loan
term:                        60 months                        54 months
interest rate:             12.5%                              7.5%
payment:                  $450                                $436

monthly savings:       $14
total savings:        $3,434
6 month shorter loan
 
Overall, at whatever level your credit score is at and whatever interest rate you are currently paying on your car loan, refinancing can save you anywhere from several hundred to several thousand dollars over the life of the loan. Check online and your local credit union or bank to see what they offer and to see if you qualify to refinance.

Financial experts tell consumers to check all areas of their monthly budget to see where they can cut, like insurance, groceries, cable bills and phone bills. Your car loan payment is an expense that you can easily reduce by refinancing.

We’ve been discussing this topic with Heather Dietel, Director of Business Development at myAutoloan.com, a licensed auto loan refinancing lender.  She has indicated that if you are paying more than what you think you should, it a pretty easy task to inquire and find out if you can save money.  So where do we begin?

When and How to Refinance
Consumers can refinance their car loan after three on-time payments, Dietel explains. Three to six on-time monthly payments is usually the minimum and there’s no point at which it’s too late to refinance. The more on-time payments you have, the more chance you have to increase your credit score. But you don’t want to wait too long since you want to start paying a lower interest rate as soon as possible.

So how do consumers start the process of refinancing? Usually, the easiest way is to go online and fill out an application with a lender that does auto loan refinancing Dietel says.  “It’s so easy to do it online, it’s not worth the time to try and get your current lender to match any lower rates you’re offered,” she says. “Plus, you’ll get responses within minutes. This can help you make a good decision. It’s almost always a different lender that will refinance you. Not everyone who applies is approved though. You can get rejected by making a late car payment and not taking care of your credit.”

If you still don’t have a prime credit score, you may look like too much risk to the lender who is considering refinancing your car loan. Dietel says to try your local credit union if you were denied online.  “Generally, the new lender refinances your current auto loan for the amount left in the current term,” Dietel says. “For example, if you have 42 months left in your current term, they will refinance you at 42 months at a lower interest rate so you will pay less for the same vehicle in the same amount of time. However, your term is flexible and may be shortened or lengthened to accommodate your particular refinance needs.”

Once you apply online and get approved, a loan agreement will be mailed overnight or will be available online, Heather explains. Then you sign and return the paperwork to the lender. A check for the remaining balance of your old auto loan is sent to your current lender and the loan is paid in full to your former lien holder. Then your vehicle’s title is transferred to the new lien holder and you start making payments to your new lender.  “As with anything related to the Internet and money, you need to be careful about which sites you approach to apply for a refinancing loan,” Dietel says.

Information to have ready when applying for a refinance car loan:
• VIN number
• current mileage
• current lien holder
• current loan information – requested amount to be refinanced, monthly payment, date of first payment
• vehicle make, model and style

Our last entry is going to cover additional areas of an auto refinance loan and detail some of the benefits associated with taking the time to investigate.  See you then.

Popular misconceptions about auto loan refinancing are that only people with bad credit should do it and that there is a ton of paperwork and time involved.  Surprisingly, this is not true.   Even buyers who were approved for a car loan with excellent credit can also benefit by doing an auto refinance to get an even better rate – it’s all about when they originally applied and what the rates were many months ago.  It is a moving target as you know.

“Many times auto shoppers pay more than they have to pay because they need a car,” says Heather Dietel, Director of Business Development at myAutoloan.com, a licensed auto loan refinancing lender. “If the individual had to have transportation and purchased a car with higher rates at the time, and they’ve been working to rebuild their credit, they will absolutely be surprised to see how much money they can save by refinancing.”

Who Should Refinance?
There are several different situations when refinancing an auto loan is beneficial, says Heather. You should refinance if you had a poor credit score when you bought your car and signed a loan with a high interest rate, if you reviewed your home budget and need to trim outgoing cash and reduce fixed expenses or if you’ve experienced a medical or other type of emergency and need to reduce cash outflow.

“Basically, refinancing is just not something that has been a priority with auto finance customers in the past,” Heather says. “Not until the current economic crisis has it really become a great option for many people who are trying to reduce their costs.”

If you signed your car loan with a high APR, like 15 to 20% and higher, you’re NOT stuck with that high interest payment.  Even if you bought your car a year ago with a high credit score and an APR of 7.5%, you can still refinance to get an even lower rate, Heather says.

“Even if you had excellent credit when you bought your car, the dealer can still mark up your interest rate,” she explains. “Not everyone knows that the dealerships can mark up rates but it happens all the time.  Also, the Fed rate has gone down, so it’s cheaper to loan money. You can lower that 7.5% rate to a 5.5% rate and save money.  Right now, the rates can’t get any lower.”  If you have good or bad credit or a low or high interest rate, it’s always a good idea to try and get a lower rate by refinancing, Heather says.

Because there are a lot of sub-prime lenders that refinance auto loans, you don’t have to have a credit score of 650 or higher to be considered, she says.  “Basically, a FICO score above 560 is where to start,” Heather says.  “As your credit score increases, the greater your chances are of getting multiple approvals and competitive rates.  It’s easier to get approved for refinancing than to get a car loan.”

Tomorrow we will discuss “When” and “How” to go about getting an auto refinance loan and detail some of the things you need to know or have so that you can apply online, whenever you want to and from the comfort of your home.  See you then.

 Similarities:

• Rates are based on credit history.
• You may have individual or joint applications to qualify for the loan.
• There is a loan to value maximum. Borrowing equal to or less than what the asset is worth.

Differences:

• Zero closing costs with auto refinancing. Yes, I said it. Zero closing costs.
• In most cases it can all be completed on line or through fax/email. No in person signatures required.
• Only a few papers to sign vs. a stack. We all know the stack I’m talking about for home financing.

So many people are finding it difficult to make ends meet these days. Lowering any of your bills is helpful. You can save in multiple ways. Lower your payment, lower your interest rate, extend your term, put money down or do it all.

Example of savings:

$15,000 original loan amount, 18% rate, 60 month term = $381 a month

You paid on the loan for a few months to a year and now you owe $13,000 but still at the $381 monthly payment.

$13,000 new loan amount, 13% rate, 60 month term = $296 monthly payment. You now have $85.00 more a month in your pocket and you didn’t have to pay a dime to do it.

myAutoloan.com has multiple lenders in the auto refinance space. You have the power to compare offers and pick the one that best fits your needs. Our rates begin at 5.45% for excellent credit and go up from there.  What are you waiting for? Apply now for auto refinancing.