Here are some frequently asked questions about auto refinance.
Q: What is an auto refinance loan?
An auto refinance is a loan that pays off your existing auto loan, similar to a mortgage refinance, but with a much simpler and faster process.
Q: How does it work?
Your new lender pays off your old loan and the title to your vehicle is transferred to your new lender.
Q: 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.
Q: 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.
Q: 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 (usually $5 to $10) and state re-registration fees ($5 to $75). These estimated 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.
Q: 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.
Q: 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.
Q: 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.