5 Essential Car Loan Refinancing Tips - OpenRoad Lending

5 Essential Car Loan Refinancing Tips

Many consumers get nervous when sitting face to face with a banker or loan officer about to either grant them credit for a big ticket item or decline them for their request. When you decide to finance or refinance with an online lender, that anxiety goes away. Now you are dealing one on one with a computer keyboard. This article is to provide you a few tips that you can keep in mind to make your auto loan refinancing experience a good and productive one.

1 – Make Sure the Refinance is Worth It

There is definitely a point where the cost of refinancing your car loan will be more than the benefits, and you need to know where that point is. So what is the magic number? Well, in the end it will depend on how much you’re currently paying and what you new payments will be. But generally speaking if you owe less than $7,500 you probably should not bother with refinancing. While you can still see some savings, it probably will not be enough to make a big impact on your pocket book. To gain the maximum savings on a refinance car loan you should be financing more than $10,000. Most lenders will not even allow you to refinance anything below this amount.

2 – Keep Your Information Consistent

This may sound like a simple thing, but you will run into fewer problems if you remember this: the information on your new loan has to match the information on your old loan. Keep the same spelling of your name and everything else. So if you go by Dave normally but put David on your previous loan, make sure to put David on the new loan as well. This is to avoid titling errors and questions from your current lender when they receive a payoff check for your new loan. Do not forget about middle initials either.

3 – New Loan Amount

One of the beautiful things about refinancing is you sometime have options to add in an Extended Service Contract or GAP coverage that your do not have on your existing loan. In make cases, you can get this added protection without your car payments increasing. Keep in mind that the lender will not allow you to finance an amount that is greater than a certain percentages of the actual value of your vehicle so there are some circumstances where you will not be able to finance these beneficial products. OpenRoad also offers Painless Dent Repair to take care of those unwanted dents and dings in your car to get it looking like new again.

4 – Give Accurate Information

This one should be obvious, but you’ll want to make sure that all the information you have on the vehicle is accurate and up to date. The lender will want to check the value of the car to make sure that it fits within their Loan to Value (LTV) guidelines. You will need to provide the current mileage on the vehicle along with all of the equipment on the car like power windows, cruise control, etc. All of these options will assist the lender in determining the actual value of your vehicle and determine the amount they will allow you to finance. The LTV can also be a factor in determining the interest rate you will be paying on the refinance car loan.

5 – Watch Interest Rates and Fees

Remember that the whole point of car loan refinancing is to save money. So when you see your new interest rate, fees, and the new monthly payment you need to make sure that you’re actually saving money. The amount of savings will of course depend on the size of the loan, but in most cases, consumers can save hundreds of dollars over the life of their loan. OpenRoad Lending does not charge any application fees or any hidden charges for you to refinance your car loan. The process is simple and you could be on the OpenRoad to savings with just a few clicks of the mouse.