How Refinancing an Auto Loan Can Save You Money.
With the state of our worlds economy making monthly payments is getting harder and harder. United States job loss totals are higher than they have been in over thirty years. Americans are finding it tougher than ever to find steady employment. As a result bankruptcy, foreclosure and repossessions are skyrocketing to record breaking numbers.
There is help out there for people with auto loans. With many of us paying outrageous interest rates and high payments, people are always looking for ways to lower there bills. Refinancing your auto loan is one of the quickest ways to reduce debt and lower monthly bills.
The first step is to know what you have. Find out what your rate is and how much money you owe on your vehicle loan. This can be obtained by calling, checking online, or faxing a request to your auto loan lender. Once you know what you owe then you can determine how beneficial a refinance will be. Make sure to get your current interest rate. If you have had your auto loan for at least a year, a refinance can almost always lower your payment.
Determine if you have any money to put down. Putting money down with your refinance can also lower your payments even more. Putting down increments of $1,000 will on the average lower your payment by $20.00 a month.
The next step is to do research. Search around for a better interest rate. Try to find a rate that is at least one to two percent better than the rate you are currently paying. The better the rate the more money you will save a month.
Call your current lien holder for the refinance. As long as you have kept up on your payments, your current lien holder will do all they can to get you the best rate. They want to keep your business their. Tell them you want to refinance your loan and have already received quotes with a better rate. In turn, they will be more aggressive in helping you get a better rate.
Search the internet. There are many sites online that will offer you a free quote. The loan term will also determine how low your payment will be. The longer you finance your loan, the lower your payment will be. The most popular loan term currently is 72 months. Compare rates for 60 months and 72 months. Sometimes the rates at 60 months are lower. The payment sometimes is the same as payments at 72 months. It is a much better way to go. You will pay less money in interest with a shorter term.
Search online for a free payment calculator. You can type in how much you owe, the term, and the interest rate and it will calculate what the payment will be. You can compare different scenarios to see if you need to put money down or not.