What You Should Know About Auto Loan Refinancing


surfer-2089817_640Automobile loan refinancing can be quite the safety net for some car owners; as long as they take an accurate assessment of their situation and understand the terms under which this option is beneficial. You should ask yourself questions such as:

  • Has your credit improved from bad to good since you got your current loan?
  • Have national interest rates decreased, making the refinance option viable?
  • Did you get a bad deal in your first loan, despite having good credit?

If you can answer any of these questions in the affirmative, then it may be time to check out current auto loan refinance rates to see what they have in store for you. Below, we’ll elaborate a bit on how to go about getting a deal that you can be happy with done.

Financial Hardship Considerations

It should become clear after just a few payments whether your current auto loan is just a little too much to handle; this is one of the reasons for which the refinancing option can ease the burden considerably. It’s better not to wait until you’re close to missing a monthly payment because the figure is too high. The best way to combat this is to regularly search the web for the current interest rates being offered by the lenders you would consider. When the time is right – or before, if necessary, approach your current lender first.

A note: if you apply and receive a rejection, then that means you should wait a few months and pay your bills on time to see an improvement in your credit score. Making sure that you pay your credit cards down always aids your credit history, as well s avoiding opening any new accounts. Doing this is the best chance you have of securing a refinance offer the next time you apply – just make sure not to do it right after the first rejection, because these inquiries negatively affect your credit history.

The Chance at a Better Interest Rate

This could arise for a number of reasons. Let’s say that you’re actually a prime borrower, and you went with an auto dealership the first time around. The problem with this is that auto dealers don’t always give you the best deal that your credit history would suggest; credit unions and local community banks are more reliable for this – you don’t really need negotiation skills to command the “proper” offer.

As a result of this, if you later learn that you can get a better interest rate – and, your credit score has improved even more since your current car loan went into effect – you can refinance and still make out better than before even though it is now a used car loan. If this sounds tricky, don’t worry; just use one of the many auto loan calculators on lender websites to make sure you come out ahead.

Lastly, your first option when you want to refinance is to check with your present lender. It may happen that they have the best deal for you, given your history with them.

Other than the short explanation of the above reasons, interest rates can decrease at any time, making for a good refinancing inquiry. Ultimately, you have access to all the information you need to see if a better auto loan awaits you afterwards.

Join our newsletter


Subscribe to get the latest "Engineer Your Finances" content via email.

Powered by ConvertKit
About the author

Join our newsletter

Subscribe to get the latest "Engineer Your Finances" content via email.

Powered by ConvertKit

ModestMoney.com Top Finance Blogs


SSCP   CAS-002   9L0-066   350-050   642-999   220-801   74-678   642-732   400-051   ICGB   c2010-652   70-413   101-400   220-902   350-080   210-260   70-246   1Z0-144   3002   AWS-SYSOPS   70-347   PEGACPBA71V1   220-901   70-534   LX0-104   070-461   HP0-S42   1Z0-061   000-105   70-486   70-177   N10-006   500-260   640-692   70-980   CISM   VCP550   70-532   200-101   000-080   PR000041   2V0-621   70-411   352-001   70-480   70-461   ICBB   000-089   70-410   350-029   1Z0-060   2V0-620   210-065   70-463   70-483   CRISC   MB6-703   1z0-808   220-802   ITILFND   1Z0-804   LX0-103   MB2-704   210-060   101   200-310   640-911   200-120   EX300   300-209   1Z0-803   350-001   400-201   9L0-012   70-488   JN0-102   640-916   70-270   100-101   MB5-705   JK0-022   350-060   300-320   1z0-434   350-018   400-101   350-030   000-106   ADM-201   300-135   300-208   EX200   PMP   NSE4   1Z0-051   c2010-657   C_TFIN52_66   300-115   70-417   9A0-385   70-243   300-075   70-487   NS0-157   MB2-707   70-533   CAP   OG0-093   M70-101   300-070   102-400   JN0-360   SY0-401   000-017   300-206   CCA-500   70-412   2V0-621D   70-178   810-403   70-462   OG0-091   1V0-601   200-355   000-104   700-501   70-346   CISSP   300-101   1Y0-201   200-125  , 200-125  , 100-105  , 100-105  , 1Z0-803  , 400-051   EX300  , CISM   100-105  , 000-106   400-201   642-732   220-902   70-410  , MB6-703   810-403   70-243  , CAS-002  , AWS-SYSOPS   70-462   70-410   2V0-621   LX0-103   70-461  , 220-902   1Z0-144   70-178   70-270   350-080  , 1Y0-201   1z0-808  , NSE4   102-400  , ADM-201   SSCP  , 200-125  , 640-911   000-104   640-692   300-320   350-060   000-089  , 000-017   1z0-808   700-501   1Z0-051  , 70-177   M70-101   300-209   70-461   3002   N10-006   VCP550   70-487   300-320  , 3002   700-501   NS0-157  , 1V0-601   CAS-002