We are outlining and describing area of auto refinancing that are often misunderstood in the auto financing world. . What consumers have not clearly been aware of is that by refinancing their car loan, they can possibly save money. Misconceptions are that only individuals with bad credit should do this but be prepared for a lot of hassles and paperwork. We hope to dispel that as we provide additional information on how and when to seek out an auto refinance loan.
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.