Get information on car
loans and how to refinance auto loan before you pick what broker to
go with.
Current car loan
rate comparison
*All companies offer free no
obligation quote
What
is auto refinancing and how can I benefit by auto loan refinancing?
Auto refinancing is one of the best ways for saving money, but most people never
thought of refinancing their cars before. Car refinance is the same as home
refinance. When refinancing car loans, you pay off your current car loan with a
new refinancing car loan from a different lender that has a lower rate. You
benefit because refinancing auto loans makes your monthly car loan payments much
less, and your interest rate drops, which can allow you to pay off the balance
of your car loan even quicker. Huge numbers of homeowners refinanced in 2002 and
2003, and now many car owners are realizing you can save thousands by
refinancing auto loans too. Car refinancing has become a very popular trend with
dropping interest rates. You can use the money you save to pay off credit card
debt, or accelerate your car loan payoff.
Who
should refinance their car loan? What APR % should I look for refinancing my car
at?
Anyone who did not get a 0% to 4% APR auto loan from the carmakers should
consider a car loan refinance. Even if you got a decent auto loan rate, you may
want to consider car refinancing. I like to use the 1% rule. After you buy your
car, get a free refinancing quote at sites like
HSBCand
Driverloans
looking for refinancing auto loan rates at least 1% less than your current car
loan interest rate. Then recalculate these car refinance rates to see how much
it would save you to refinance your car. You may be surprised at how much money
you just found.
Do I need an
appraisal to refinance my auto loan?
Many people wrongly
think an appraisal is needed for to refinance their auto loan. Unlike your
house, which requires an appraisal because it is based on the equity in the
home, car refinancing is based on how much you need to pay off your current auto
loan, and not on the value of the car.
Generally, the interest rate that you qualify for will be based on
your credit history and income. You lender should give you a car
loan quote right away.
Direct financing is when you obtain financing straight from a bank
or other lender.
Indirect financing is financing from a dealer. Dealers usually have
higher interest rates then other lenders.
Yes, almost all auto loans are secured by the vehicle itself. If
something happens to the vehicle, the lender’s security is
gone. That is why the lender will want to protect its interest in
the vehicle by requiring you to get insurance policy that
provides collision and comprehensive coverage. The minimum amount
of car insurance
coverage you will need is generally determined by the
lender’s loan policy.
How are interest rates calculated for my auto
loan?
Interest rates are determined by many factors: credit history,
amount of down payment, credit risk, and general financial factors
such as the amount of interest the bank is charged for the money
being loaned to you.
Do I
have to use the full amount of the loan for my auto?
Yes, as lenders will loan only how much they can secure by the
vehicle itself. Any accessories added to the vehicle increase its
value and will also be financed at the same time as the purchase.
Most auto lenders will not finance amounts greater then the value
of the car. This is not the case if you take a personal loan
collateralized by a car you already own. If a car is being used as
collateral for a personal loan, you should be able to use any
amount between the minimum and maximum approved.
