Important Things to Consider When Refinancing - OpenRoad Lending

Important Things to Consider When Refinancing

If you have been anywhere near a television for the last couple of months you have heard all of the ads letting you know that now is a great time to buy a car because interest rates are so low. However, you could be like most Americans where buying a new car is not a great options for you right now. Even if purchasing a new or used vehicle is not right for you right now, have you should considered refinancing a car loan? There could be some real savings by doing this! The great thing is it will not take much time but the savings can be significant.

Benefits of Refinancing a Car Loan

Before you consider actually getting a refinance car loan, you should know what the main benefits are. You may be able to extend the period of time your loan is financed or you may be offered a lower interest rate or maybe even both. Each of these will help reduce your monthly payments.

There is also a chance that you can refinance your car loan and add an Extended Service Contract to help with any future mechanical breakdowns or Gap Coverage to assist in the case of an accident and your insurance company does not pay off the outstanding balance.  So either way, the goal here is to lower your monthly payments to help you save several hundred dollars every year!

Cost of Refinancing

With most lenders, there are not any application fees or loan processing fees associated with refinancing. You will more than likely be forced to pay any titling fees associated with refinancing your car loan but these are minimal typically ranging from $10 – $40 depending on the state in which you live. There is no sales tax on a refinance loan since you already own the vehicle and you have already paid it when you purchased it originally.

More Things to Consider

Another thing to consider before you think about refinancing a car loan is how much you have left on your current loan. If you’ll have your car paid off in the next year, it is unlikely that you’ll really save much money by getting a refinance. You should instead either sell your car or stay the course and pay it off as scheduled. However, if you owe more than 12 payments on the vehicle and the vehicle fits most lenders guidelines of 2004 or newer with less than 80,000 miles, it is probably worth your while to refinance.

Make sure you do your homework before doing any kind of a refinance. Always remember that the goal is to save money on your monthly payments. Otherwise you may want to either just pay off your currently loan on schedule or sell your car