Is it time for auto refinancing?
Didn't shop for the right car loan the first time around? Don't worry. Most people don't. Or maybe your credit wasn't so great at the time you signed that dotted line or the interest rates were just higher. Whatever the reason, now's your chance to change all that.
If your credit has improved recently, you might qualify for a better auto financing deal. And by doing a little homework like you are right now, you'll be in a better position to get a great deal.
By the way, refinancing a car can be a pretty easy process. All you have to do is let us help you connect with the right auto refinance lenders.Ready to get started?
Here are the top reasons most people choose to refinance their car:
Interest rates are always changing. If you’re stuck paying a high interest rate on your loan, you should check your options. You could save a lot every month.
If your auto lease is about to expire, you'll probably be offered the option to buy the car with a dealer-backed financing package. Treat this offer as merely a starting point and definitely shop around for better terms.
If you stretch out the remaining balance of your auto loan over a new, longer term, you could drop your payment and free up some cash. Although you will be improving your cash flow today, keep in mind that in the long run you could pay more total interest this way. It may be worth it but it may not be. Make sure you think it through.
- Break-Even Point
- The break-even point is the point at which the monthly savings created by a mortgage refinance offsets the cost of refinancing. It can also refer to... <a href='/glossary/what-is-break-even-point' title='See the full definition of Break-Even Point'>read more</a>
- Upside-Down Loan
- A loan secured by a collateral that has depreciated in market value and is worth less than the balance owed. For example, if you owe $5,000 on a car... <a href='/glossary/what-is-upside-down-loan' title='See the full definition of Upside-Down Loan'>read more</a>
- Annual Percentage Rate
- The cost of credit, including the interest and fees, expressed as an interest rate. APR was created to make it easier for consumers to compare loans... <a href='/glossary/what-is-annual-percentage-rate' title='See the full definition of Annual Percentage Rate'>read more</a>
- Credit Score
- A credit score is a number generated by a statistical system used to rate the credit of an applicants according to various characteristics relating to... <a href='/glossary/what-is-credit-score' title='See the full definition of Credit Score'>read more</a>
- A borrower is a buyer who does not pay cash, but instead finances some or all of a purchase. <a href='/glossary/what-is-borrower' title='See the full definition of Borrower'>read more</a>
- A lender is an entity that makes funds available for borrowing. <a href='/glossary/what-is-lender' title='See the full definition of Lender'>read more</a>
- Loan Terms
- Loan terms are what is expected of the lender and borrower upon disbursement of a loan. <a href='/glossary/what-is-loan-terms' title='See the full definition of Loan Terms'>read more</a>
- Monthly Payment
- The monthly payment is how much a borrower will pay each month toward principal and interest on a loan. <a href='/glossary/what-is-monthly-payment' title='See the full definition of Monthly Payment'>read more</a>
Frequently Asked Questions›
- Why should I refinance my existing auto loan?
- Typically, consumers refinance to get a lower interest rate in order to reduce their interest costs, or to lower their monthly payments. Auto loan rates are at very low historical levels, so consumers are increasingly taking advantage of this by refinancing.
- Are there any fees associated with an auto refinance loan?
- Typically, the only fees associated with an auto refinance loan are fairly standard transfer of lien holder fees and state re-registration fees. These fees may vary by lender, state of residence, etc. Be sure to check if your existing lender has any pre-payment fees. This could factor in to your decision to refinance.
- Are auto refinance loans growing in popularity?
- Yes. Since auto loan interest rates have been at historically low levels, an increasing number of consumers are choosing to refinance their existing auto loans.
- Do you have refinancing options for people with less than perfect credit?
- Yes, we offer several options to help you get an auto loan with poor or bad credit.
- What information do I need to provide to apply for a refinance loan?
- Generally speaking, the lender will require your driver’s license, proof of income from recent pay stubs, your bank account information and your credit score. If you are applying with a co-borrower, the lender will need their information as well. Lenders may have different requirements.
- When should I refinance my existing auto loan?
- As with any personal finance decision, it really depends on your individual goals. If your goal is to reduce the amount you are paying in interest, you may want to consider an auto refinance loan with the same or reduced term as your existing loan. If your goal is a smaller payment, you may want to consider extending the term remaining on your existing loan, although this may increase the total interest paid over the life of your loans.
- How much will I save by refinancing my existing auto loan?
- How much you save depends on things such as the remaining balance of your existing loan, the difference between your old interest rate and the new interest rate, the term of your new loan, etc.
- What do I need to do to apply for an auto refinance loan through LendingTree?
- Simply complete an auto loan request. You’ll typically receive a response within hours, and if approved, you may receive up to four offers from competing lenders. If you’re approved and you accept one of the offers, the lender will take care of the auto refinance process for you.
- Will my inquiry be reported to the credit bureaus
- Yes, the lender will pull your credit score and your credit report in order to assess your creditworthiness for an auto loan. This inquiry will show up on your credit report. It will likely affect your credit score. However, if you’re shopping for a loan with several lenders within a 7-10 day period, it will only show up as one inquiry, not multiple.
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