| Aug 30, 2010
Most car owners know that auto refinance options are available to them, but they choose not to undergo the hassle because they do not fully understand the benefits that await them. In fact, many people think the idea is a waste because car loan terms are relatively short. Three to five year loans are nothing compared to the likelihood that these car owners also have 30-year mortgages. Even though home refinancing has always been more prominent, the option for a car refinance loan has become more popular in recent years as people do everything they can to save money each month. Here are the top three reasons that people choose to refinance a car loan.
The first reason is the main one, which results in lowering your monthly interest rate. This is the reason behind auto refinance loans because it can serve multiple purposes. You can either decrease your monthly payments or shorten the length of the term and pay less interest overall. Either of these decisions will help you budget your money better and save. You may be approved for a lower interest rate if you obtained your initial car loan with less-than-ideal credit. After a year or two of building your credit back up, you may now be in the position to be approved for a much more desirable rate.
The second reason that car owners decide to look into auto refinancing is that the process is usually cheap and ends up saving them money in the long run. Lenders usually charge zero or minimal fees to apply for a refinanced car loan. With no fees for paying off your first loan ahead of time, and no additional charges, you may be able to refinance your car for little to nothing!
The final reason is the ease with which you can obtain a auto refinance loan. While a credit check will obviously be involved, there are many lenders who are willing to help borrowers with limited credit refinance their car loan. With online lenders, you limit or completely abolish the need for paperwork and processing fees. This means less hassle and more savings for you. You should know that fairly stringent requirements are in place to be eligible for a refinance car loan, but it does not hurt to apply and see if you are eligible! If you end up qualifying, you can begin saving money after just a few minutes of your time.