Auto Loan Refinancing
Anyone, who owns a house, knows that when the interest rates go
down refinancing becomes a lucrative option. The same holds true
for auto loans. When the interest rates on auto loans go down
refinancing becomes something to seriously consider. Also, if
you bought your car at a time where your credit was not as good
as it should have been and you were forced into a auto loan with
a high interest rate, you should look at your options to get a
more favorable auto loan. Another example, where refinancing may
make sense, is when you are no longer able to make your monthly
payments. Refinancing will not only save you money, but it can
also be used to simply reduce your monthly dues, and as such
making it more realistic for you to stay current on your auto
loan. There are many refinancing companies that can make a
repayment plan that suites your (changed) situation.
So, how much money can be saved with auto loan refinancing? Let
me show you an example that will give you a feel for the
magnitude of the savings you may be looking at. Let's say you
buy a car and you need financing for $15,000. The interest rate
at the time is 8.5%. Repayments have been made since then and
you are having a good credit history. When you take your auto
loan package to a refinance company you have $12,485.56 in
payments left and 48 months to be paid (out of the original 60).
Your current monthly payments are $307.75 and your total
interest payments over the total auto loan period would be
$3,464.88 of which you already paid $1,178.54. Your refinancing
company tells you that they can refinance your auto at an
interest rate of 6.2%. After this adjustment the monthly
payments are $294.37 and the interest bill will be $1644.20. The
savings would be $642.14 and your monthly payments are less!
When you sign up for a new auto loan with a refinance company
the following steps happen. The new refinancing company will pay
the existing balance on your auto loan and any possible fees to
the existing finance company. The refinance company will then
send you an invoice which includes a new auto loan with a lower
interest rate. With your lower interest rate you can either
reduce your monthly payments or shorten the pay back time for
your auto loan. It should be noted that when you sign up with a
refinance company, any final interest bill that you would have
incurred with the initial financing company, had you stayed
there, will not have to be paid. This is because only the past
interest can be accounted for. After this the customer does not
need to deal with their previous finance company anymore.
Ok, you are interested in exploring the possibilities of
refinancing your auto loan. How do you find the right company?
The world wide web is clearly your best source here. Explore the
internet for a company with the best options for your current
situation. Keep an eye on hidden costs and be aware of all terms
and conditions. Use a calculator to get the accurate costs of
any auto loan refinancing plan. When you have chosen an
appropriate company, you can now complete the application
online. There is no obligation in doing this. It is done so you
can get the best auto refinance rate. Remember the reason you
are doing this is to save money. We advise you to fill in
applications to find the best rate. Finally proceed with the
best refinance rate. Realize that this is not normally with your
current finance company. And if it is, ask yourself the question
why they did not provide you with that information before you
started asking around!