There are millions of consumers today looking at refinance their homes to save significant dollars. Amazingly, you might be able to refinance your car and have the same results and in a fraction of the time. While some might refinance to stretch out their loan over a
longer period and therefore reducing their car loan payments, others are
refinancing to put money back into their pockets. Regardless of your
reason, a refinance car loan may be the right choice for you.
It
is not all about interest rate either. Sure you see 0% interest rates
advertised all over the newspaper and television but does everyone
qualify for such a great rate? How do you know a super interest rate
from a bad one? The problem is that advertised rates are for those with
prime credit report scores, typically those with a credit score over
750. The vast majority of people have less-than-perfect credit, so
looking the very best rates and terms is hard. At the least, you'd have
to apply to numerous institutions. That's why car dealers most of the
time add on two percentage points above what you may get through a
financial institution directly. The finance office is one of the largest
profit centers for a franchise car dealer.
If you're wondering if refinancing is right for you, here are a few rules of the road.
Improved Credit Scores
If
your credit has improved, chances are you might be able to secure a
better rate just as most can with their mortgages. In fact you had a
blemish on your credit report score but enough time has passed such that
it won't have the same negative impact. But don't forget to do what you
might to improve your score before applying for any car refinancing; your
score is a moving target that changes as you make positive changes.
Dealer Financing
If
you financed your car at the dealer, you more than likely will be able
to lower your rate. Remember that dealer financing isn't always the best
and, in just a few minutes, you can now evaluate your options. Most of
the time, all you need to know is your current loan balance, your
monthly payment, and your credit score or general range (excellent, very
good, fair).
Watch the Term
It's easy to refinance
your loan and think you're lowering your expenses just because your
monthly auto payments are smaller. But that may be because you've
extended your loan another five years. If you do refinance, be sure you
look at apples to apples using the annual percentage interest rate.
Ideally, you must only refinance the existing unpaid balance and not
extend the loan over a longer period.
So, just as refinancing your
home might be a wise financial move, so too could refinancing your car.
Searching for and finding an online lender will most likely be your
best solution for refinancing your car loan. There you can find a no
obligation application and know your terms within minutes of approval.
Go online to OpenRoad Lending for more information about car loans and auto refinancing. You can also find useful tools to help with your car
refinance process.