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Buying New Cars |
What is auto refinancing? How do I benefit by auto loan refinancing? Note: Most lenders will not refinance their own auto loans. So if you plan to refinance your auto loan, you will need to look for a lender other than your current lender. Fact: You don't need an appraisal to refinance your car loan Credit Crisis Alert The scary truth about your credit score Your credit score will NOT drop if you run your own credit report |
How to lower your current car loan payments |
How To Get Your Credit Report
If you are going car shopping, get your credit report instantly online right now so you'll have it and apply for car loans online now so you'll know now whether you
are qualified. DO NOT apply for a car loan unless you have your credit score in hand. You can get your credit report instantly online from Experian,
TrueCredit or
Equifax.
Forget about the free annual credit report, it does not give you the credit scores that you need, you have to pay to
get them. Be sure to get your credit score with the credit report. If your credit score is below 600, don't bother applying for a car loan until you repair your credit first. Learn how to repair credit at our other site
DebtWizards.com.
It's absolutely the most important priority that a person with bad credit, paying a high APR, refinance their car loan to a lower APR.
It's true, most bad credit borrowers can indeed refinance to a lower APR, but many don't think to try because they were "programmed" or duped by the dealer into thinking they are stuck at 21-25% APR.
Real world auto refinancing example
Suppose you borrowed $16,500 for 60 months on your new Honda Accord. Let's assume your credit was bad, you had no previous credit, or the dealer lied about your
credit and charged you a higher APR than you should have paid. This happens quite a bit. Suppose the dealer "got you approved when no one else would" at 21% APR
for a 60 month car loan. Sound familiar? So you start paying off your car loan for a few months, then refinance your car loan with another lender at 7% APR.
| Interest Rate (APR) |
Monthly Payment |
Total Interest On Car Loan |
| 21% | $446.38 | $10,282.83 |
| 7% | $330.63 | $3,337.57 |
Your current payment at 21% APR would be: around $446.38
Your new car loan payment at 7% APR is: around $330.63
You save $6,945!
Send in an extra $50 monthly principle more than the $330, and your loan will pay off even quicker. See how powerful auto refinancing can be for you? Most people have no concept of the time value of money, and just how bad high interest car loans are for your bank account, and what a difference 1% makes. That $6,945 is better off in your bank account, not theirs. Of course your actual APR would depend on your credit rating. Not everyone gets the 7% or lower APR, but I'm sure it's got to be lower than what you're paying now.
It's very important to refinance your auto loan early, because with car loans, the interest is mostly paid in the earlier payments. The earlier your car loan is refinanced, the more money you save. Our examples here are based on savings only if you refinance during the first couple of months of a car loan. If you wait until the 4th year to refinance your car loan, your savings will be a lot less.
Who should refinance their auto loans? What APR % should you look to refinance a car at?
Anyone who did not get a 0% to 3% APR car loan from the carmakers should consider a car loan refinance. Even if you got a decent APR auto loan, you should consider
car refinancing. I like to use the 1% rule. After you buy your car, start watching the auto refinancing interest rates at sites like
Capital One Auto Finance, Up2Drive
and myAutoloan.com looking for
refinancing auto loan rates at least 1% less than your current car loan interest rate. Use the calculators on these car refinance lender sites to see how much it
saves you to refinance your car. You'll be astounded at how much money you just found, and you'll stop the hemorrhaging in your bank account.
Tips to ensure a speedy auto refinance loan approval
Pay close attention to these important points, because you would hate to get rejected for making a stupid clerical error.
CarBuyingTips.com Auto Refinancing 101: The steps to refinance your car loan.
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I already got a good APR car loan. Why do I need to refinance my car?
Suppose you already got a good 7% APR car loan. Here's another example with the same $16,500 loan for 60 months mentioned above:
| Interest Rate (APR) | Your Monthly Payment |
Total Interest On Car Loan |
| 7% | $326.72 | $3,103.19 |
| 6% | $318.99 | $2,639.47 |
Your car loan payment with 7% APR: $326.72
Your new payment when you refinance your car to 6% APR: $279.21
You save $463.72!
The above example shows you that even if you got a low APR you can benefit by auto loan refinancing. It also demonstrates just how much money lenders have been making off us all these years. Would you have thought in a million years that getting a 7% APR car loan was costing you $463 too much? In this day of stock market volatility, corporate accounting scandals, and watching your retirement account plummet, you need to empower yourself more, and take charge of every penny of your financial well being. Don't let the greedy lenders do it for you. Use the friendly lenders that we review here, like Capital One Auto Finance, Up2Drive and myAutoloan.com.
If you don't look into auto refinancing today, you could be throwing away thousands of dollars!
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Read our reviews of the online auto refinance sites to refinance your car loan. | |||
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Capital One Auto Finance makes lowering your monthly car payment easy. You can refinance and save an average of $500 per year in just two steps: Step 1: Apply Online - There is no application fee and you'll get a response in minutes.
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Up2Drive (a division of BMW Bank of North America) offers highly competitive rates and superior customer service. How up2drive works:
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myAutoloan.com - Offers qualified applicants up to 4 online loan offers in minutes to help you maximize your car refinance savings. How myAutoloan works:
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What about loan fees and early payoff penalties?
The "gentle" lenders that we recommend here like Capital One Auto Finance, Up2Drive
and myAutoloan.com do not have any fees. No loan application fees, no points, no origination fees, and no early termination
penalties. It's even in writing on their web sites. The only cost you might see is the small fee from your state to change the name of the lien holder on your car's
title to the new lender. Other than that, there's no scams, the only thing you pay is the loan balance and interest. It's very seamless, completed in a few days, like
you never even left your loan. The only difference is now your monthly car loan payments will drop, and the checks become payable to the new lender instead. You should
be cautious about other auto loan refinance lenders not reviewed here who might have hidden fees or charge to process your loan. Also, carefully check your current
car loan for any early payoff fees and penalties. It still may be beneficial to refinance even if there are some penalties involved. Each situation is different, so
you need to do the math.
Click Here to Continue Reading our Auto Refinance Tips
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