Save money on your current interest rate

The interest rate you received on your loan at the time of purchase may not be the best rate you can get. Shopping around for a lower interest rate and refinancing your auto loan can save you interest in the long run. Lower interest rates on an auto loan refinance will reduce your monthly payments while keeping the life of the loan at the same terms.

Lower your monthly payment

If you are currently having financial problems and are looking for ways to reduce your monthly expenses, refinancing your auto loan is a good way of acheiving this goal.  You can extend the term of your loan, reducing payments, but, this means you will be paying for this auto for a longer time than expected.

Reducing the term of your loan

You may want to choose to reduce the term of your current auto loan, reducing the overall interest you pay on the loan. Your monthly payments may be increased slightly by doing this, but, the savings in the long run are significant.

Getting equity from your current auto loan

You may want to get cash from your current auto loan.  You can acheive this by refinancing your auto loan.  If you have been able to payoff most of your current loan in a timely manner and have actually paid in advance, there may still be equity in your vehicle.  Refinancing your current loan at this time could enable you to take cash out – this is very lender dependent so it’s always worth asking.  Don’t take cash if you don’t have to – it gets a bit expensive in the long run.

To refinance an auto loan, you will need to shop around in order to get the best deal.  There are many auto refinance lender online that will help you through the process.  No matter what your reason for refinancing an auto loan, getting the best deal for you is most important.  Getting multiple quotes is always the easiest and fastest way to see what is available.  There are a lot of websites that talk about refinancing but they are really not licensed lenders – they are lead companies that sound like lenders – see if they have a BBB rating if you really want to see who is on your side when you apply.

Many online refinance auto loan companies will help you to compare prices from a number of suppliers.  This helps you to look at what is being offered in the way of interest rates.  These online refinance auto loan comparison companies are an invaluable tool in making your decision.

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The length of time you have to pay off a loan varies from 12 months to in some cases as much as 72 months, depending on whom you’re getting the loan from.  The average these days is probably 60 months.  Do keep in mind, though it sounds great to have a loan stretched out as long as possible, however, the longer you have to get it paid off, the more money it will cost you over time.  You know, “time is money.”

Down payment and interest rates also vary depending on the institution you are dealing with. If you choose to refinance your vehicle with a bank or financial institution you might find them somewhat stricter in their options available to you unlike choosing an auto refinancing company that specializes in dealing with auto refinance loans.  In other words, searching online for a loan company saves you time and give you more options.  That’s a good thing!

It’s a good idea to consider how much you can afford and shop around for different loan companies before you purchase your car.  There are fees that are associated with refinancing your vehicle such as registering your vehicle again and transfer of holder fees.  They are usually blended into the loan itself so that there is no out of pocket expense with 99% of auto refinance loans.  Most reputable online auto finance companies don’t charge you a fee, and if they don’t, mostly likely they will make it clears that there are no charges and no fees.  There may also be other fees associated with this change and they may differ depending on where you are located so did take the time to investigate what fees are associated with refinancing.

Most companies offer an online application form, with standard questions such as what type of loan you’re looking to get, how long you are looking to take to pay off the  auto refinance loan in question as well as questions directly related to the car itself, such as what year, make and model you have.  If you work with a company that provide multiple offers for you to compare then once you’ve filled out all the required questions it often takes only a few hours before you hear back from competing lenders. 

In many cases, you will get more than one offer to consider.  Just don’t be surprised if you only get one or two offers since the finance market has crashed and has yet to recover.  It’s slow but it is coming back little by little.  Once you’ve been accepted and accept a term from a lender the lender will usually then walk you through the process step-by-step until the refinancing process is complete.  Just know that you need to compare so good luck and good hunting.
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To begin with you will need to compile a list of auto financing options.  Dealing direct is a good way to save money and dealing with a company that searches for the best offers in auto loans is also a good way to go. Only through requesting and comparing quotes would you have a clearer picture on the various financing options. The time taken is now far less thanks to the net.  Companies like myAutoloan.com provide this matching and multiple offer process.  There are many websites you can visit that would allow you to understand the comparison between the various auto loans and financing deals without constantly being left confused. As there is now intense competition for customers you may find that there are some excellent deals to be had through online brokers.  Again, myAutoloan.com is a proven choice.

One of the better options to consider would be a large down payment that would then allow you to qualify for a shorter term and potentially a lower interest rate.  Of course there are also zero down payment options available for those people on a tight budget but they really are hard to qualify for.

In most cases the period of the auto loan would be anywhere from thirty six months up to seventy two.  If you were to choose the longest term then the overall cost is likely to be greater than if you could pay back the balance in a short time.  Choosing 48 to 60 months should provide you with the best rates.

Do not be afraid to negotiate with the lenders call center people you speak to.  Most would be happy to alter the conditions slightly to guarantee your closing an auto loan.  Make sure you are clear if the interest rate is fixed or flexible – We recommend that you never take a flexible rate car loan or auto refinance loan. Though a fixed rate is easier to understand it may end up costing more over time whereas a flexible interest rate would mimic the prevailing market conditions, as long as the rates are low.  So if they are low, get it fixed because we all know they are sure to rise down the road.
 

If the dealership doesn’t offer these cheap rates, you may be able to get the interest down a little bit by offering a larger original payment on the vehicle you want to purchase.  You need to realize that a car depreciates in value as soon as you drive it off the lot, so you don’t want to owe more money on what the auto is worth.  For instance, if you buy a car for $15,000, but don’t make a payment on it, you still owe $15,000 on a car that may now only be worth $14,500.

If your original payment doesn’t cover the deprecation, then you’re behind the eight ball right from the start.  This is also called being “upside down” on your auto loan.  To make matters worse, some people who don’t make a down payment often take out another car loan to buy a new car while still owing on their last one.

Many financial experts state that making a substantial auto loan down payment is the best thing to do.  They recommend that you put down at least 20 per cent of the car’s purchase price.  This way, the owner should start to see positive equity about half way into a four-year loan, as long as they keep the vehicle in good shape.

If you can’t afford to pay 20 per cent, it’s a good idea to pay off as much as possible and keep the length of the auto loan as short as you possibly can.  If you can calculate how much you owe on the car and its estimated value at any point in time, then you will know if you still owe more than the car’s worth.

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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.