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For many borrowers, refinancing a mortgage is something they will do some time during the life of the loan. What many people never consider is refinancing an auto loan, even though the car refinance application process is much faster and easier than the typical home refinance application. In addition, borrowers can save thousands over the life of a refinanced auto loan. There are three possible ways a consumer might have ended up with an interest rate higher than what they can refinance for.
- He financed a new car or truck purchase at the dealership. If that person neglected to read the section of this website on financing a vehicle purchase he was likely unaware of the fact that dealers typically charge higher interest rates on their loans. While reviewing the terms of their agreement the borrower discovers that his interest rate is 11%, but there are rates available for refinanced loans that are as low as 5%. Refinancing at this new rate will save you over $1,000 a year on a $20,000 loan.
- The borrower was unaware of what was on his credit report and/or what his credit score was when seeking financing. Not knowing what the lender knows gives the lender a huge advantage when the terms of the car loan are being arranged. If you know your credit score or what is in your credit history before you begin negotiating loan terms you will know what interest rate you deserve. You might even find an error in your credit history that is artificially lowering your credit score.
- The financial situation of the borrower may have improved. A 2 point improvement in a borrower's credit score could lead to as much as a 5.5% decrease in the borrower's interest rate. Of course, a lender will not necessarily inform a borrower he can secure a better rate by improving his credit score. Rather, borrowers need to be aware of improvements in their credit scores, and then refinance their loans. Monitoring your credit score can lead to big savings. Equifax's Score Watch makes it easy to target your ideal score, see interest rates you are likely to receive and watch your score trend over time.
MoneyAisle is revolutionizing the auto loan and auto refinancing industries by having banks and credit unions actively bid against each other in live auctions for each individual consumer request. MoneyAisle creates a safe, transparent auction, providing consumers with free access to great deals in real time. The results are instantaneous; you are offered the best rate available on their platform in just a couple of minutes. MoneyAisle differs from other online auction sites, which are seller-centric, by providing buyer-centric auctions to consumers. Many sellers (banks and credit unions) compete and the buyer ultimately benefits, reversing traditional seller-centric online auction methods, used by sites such as eBay. Get $50 Cash Back - Refinance Your Car Today!
Up2Drive.com is a great option if you are considering refinancing. They are a direct lender, and are a division of BMW Bank of North America. The process is simple. You contact your existing lender and request the latest payoff amount on your vehicle. You then complete the online credit application. If approved, you will receive a loan packet containing the Up2Drive.com "drive check". You then fill out the drive check with the payoff amount and send it to your current lender. They then becomes your new lender. Up2Drive.com charges nothing to apply for refinancing, and you are under no obligation to accept their terms if approved. To qualify for an Up2Drive.com auto loan refinance your vehicle cannot have more than 75,000 miles.
Roadloans is another great refinancing option. They have been an auto finance lender for over 10 years. Roadloans finances all credit types,specializing in financing and servicing loans for customers with less than perfect credit. Their online application takes minutes to complete and you will notified whether or not you have been improved instantly. Roadloans does not charge any refinance fees. You will be responsible for a title transfer fee that ranges anywhere from $5 to $65 depending on what state you live in. That fee is charged by the state, not Roadloans. If approved for the loan you will be under no obligation to accept it. To qualify, your vehicle can't be older than 7 years, and must have fewer than 90,000 miles.
The amount of paperwork necessary to complete an auto loan refinance is negligible. You can expect to provide a limited power of attorney; a legal document that allows your new lender to transfer the title of your vehicle from your old lender. You will also need to provide an authorization for payoff; a statement that authorizes the payoff of your current auto loan. It generally lists the current payoff amount and gives your old lender your authorization to forward the title to the new lender upon receiving the payoff. Another requirement is an odometer statement certifying that the odometer reading of your car or truck is correct. One final document that is not mandatory is an authorization to debit account; a form allowing your new lender to debit your bank account for your monthly car payment. Many lenders will offer a discount on the interest rate if you agree to this authorization.
Refinancing an auto loan is a great way to save money. The application process is much faster and easier than a typical home loan refinance, closing costs are minimal, and the savings can be huge. By reducing your interest rate by even 1 or 2% you will save yourself thousands of dollars over the life of the loan. That money can then be used to pay down other debt, invest in the future of your children, or help fund your retirement.