Both options will help reduce your monthly payment. Refinancing is one of the best ways to lower your monthly payment, while allowing you to save a little extra money each month.
If you have been diligent with payments and have noticed a bump in your credit score, you may be able to go to your original lender for refinancing. If that is not an option, there are several other alternatives that are available to consumers who want car loan refinancing. There are several online refinancing companies that will allow you to apply for refinancing online and If your monthly car note is putting a strain on your budget and you want to save money, car loan refinancing is a really easy process. You can refinance your car loan to either get a lower rate or a longer term.fax over any required, signed documents. Certain things that you will need will of course be a proof of income and residency but those items again can either be faxed or mailed to the finance company. If you would rather go the traditional route, there are several banks or other finance companies that you can look into.
So what is the refinance loan process like? It is much more simpler than the original loan you signed up for. First you should research different banks to see what the possible interest rates will be. Once you have narrowed it down to two, apply to those to determine which will give you a better rate. The lenders will check your credit and you will typically have a decision in less than ten minutes. Make sure that you have the VIN number of your vehicle along with mileage ahead of time because this will cut back on the time you will spend filling out the application. If you are approved for refinancing, there are some documents that you will have to complete. Depending on which lender you decide to go with, some may require that you get a notarized power of attorney for any issues with your title. This is a service that your personal bank may provide as a courtesy.
As a general rule of thumb, while the paperwork is being processed for the refinance, if you have a bill from your old lender than is due, do not neglect paying it. This is very important because there will be a period of time between the processing of your documents and the new finance company paying off your old lender, that you are still under contract with the old lender. If you are reported as delinquent, the new finance company has the discretion to invalidate your application. So until you get correspondence from your new lender stating that you are no longer under contract with the original lender and the old loan has been satisfied, continue to behave as if you are still bound by the contract of your old lender.
Car loan refinancing is a great option if you want to get a lower monthly payment so that you can save money.