The world of refinance related to your car is one that has only been around a little more than a decade. Sure, refinancing a mortgage has been around a long time but refinancing a car is one of the best kept secrets in the finance world. This innovative product saves customers a lot of money over the life of the loan. The reason this product evolved is because car dealerships were marking up the rates being charges to the customer buying the car. When lenders discovered this, they found a way to combat that getting their customers in a better loan arrangement and keeping them as a happy customer for years to come.
Does refinancing really make that much of a difference? Yes! For each one percent you can lower your interest rate on a $20,000 loan financed for 60 months, you can save approximately $10 in your monthly payment. So let’s assume when you purchased your vehicle, the dealership marked the rate up that you would have normally received had you financed directly with the lender. In this case, let’s use 14%. You apply in just a few minutes and get approved to refinance your existing auto loan at just 9.5%. In just a few minutes your payments would go from $465 per month down to $405. That’s a $60 per month saving or $3,600 over the life of the loan.
Most lenders that offer car loan refinancing require that you have a certain amount due on your loan. A minimum of 36 months remaining is most common. Some also require that your car is not older than a certain amount of years (most lenders will refinance a 2005 or newer model). There may be other restrictions as well like the kind of vehicle to be refinanced and mileage. Great deals are available on vehicle refinance, especially online. Many lenders will refinance with no application or other fees. Although there is a title transfer fee that your state charges. This will probably be added to the amount of your refinance car loan.
Before you can refinance a car loan you must first have a car loan with an outstanding balance. Most lenders will not refinance your existing car loan unless you have made a minimum of six payments. This allows time for the current lender to receive the title to your vehicle and there will be fewer problems with the transferring of that title to the new lender.
Be sure to have some information near by that the new lender will be asking for. Items like your current monthly payment, interest rate and lien holder are just a few of the items they will need. They will also want to make sure you have full coverage insurance and a valid driver’s license.
Don’t settle for a high interest rate just because you have had a few problems in your credit history. Your dealer might have convinced you that you have to settle for a high interest rate loan, but you owe it to yourself to find out for sure. It takes just a few minutes to fill out our online vehicle refinance application, and it could save you big money.
For more information about refinancing a car loan or other car financing products, go online and visit OpenRoad Lending. There you will find useful tools to help determining payments and helpful negotiation tips to use the next time you purchase a vehicle.
About the Author: Chris Goodman has been in the auto finance business for more than 20 years and has assisted thousands of consumers with their car loan needs. He is an expert on car loans and car refinancing. Find more information online at OpenRoadLending.com and see how easy it is to get a car loan.