When you’ve gone through the effort of getting a car or motorcycle loan, it can be tempting to simply pay it off and never look back. Before you engage the cruise control, though, consider the potential benefits of refinancing an auto loan.

People typically refinance an auto loan because they’ve found a better interest rate, which would result in them saving money. But there are other situations when refinancing would make sense. The key is keeping an eye out for any of the following situations and being prepared to act.

• Situation 1: You see interest rates dropping. Interest rates on all sorts of consumer loans periodically rise or fall, influenced largely by the monetary policies of the Federal Reserve. The Fed has raised interest rates three times in 2018, but history shows that reductions will eventually come around. When they do, be ready to look for your opening.
• Situation 2: You want to improve on a “dealer-sourced” loan. If you financed your car through the dealership, you likely got a higher interest rate than you could have thanks to something called a dealer markup. A dealer’s preferred lenders commonly charge higher rates, and part of difference goes back to the dealership. Compare your current loan with offers from other sources (your bank or credit union, an online lender, etc.) to see if you can get a lower interest rate with a refinance car loan.
• Situation 3: Your credit score has improved. All those months of diligently paying off your current loan can have a positive effect on your overall creditworthiness. Lenders typically see a good credit score as a sign of a less risky borrower, which in turn can lead to offering better interest rates. If your credit score has improved since you took out the loan, you might be able to save money on interest through a refinance. You can check your credit for free on Bankrate.
• Situation 4: You want to buy the car you’re currently leasing. Car leases typically include an option to buy at the end of the lease. You can get a refinance loan to buy the car outright when your lease expires, although this approach has its pros and cons. If you want to save money on a lease-to-purchase, you’ll need to make sure that the total cost of buying the car, including interest on your refinance auto loan, would be lower than extending the lease or leasing a different car.
• Situation 5. You need lower monthly payments. Sometimes refinancing a car loan is a life preserver, not a windfall. If you run into financial trouble and want to reduce your car payment, you could refinance a loan with a longer term (from 36 months to 48 months, for instance). Although you would pay less per month, expect to pay more total over the life of the longer loan.

How to track refinance interest rates

Most refinance opportunities involve taking advantage of a better interest rate. If you find an interest rate substantially lower than what you’re paying on your original loan, it could be time to get a new deal with a refinance car loan.

To learn more, visit:

https://medium.com/@tfc.moussa/is-it-good-or-bad-to-refinance-1ae541fee64f?sk=59672445360f611bf9f7760e8048bf98

If you’ve taken out an auto loan to pay for your car, refinancing could help you save money in the long run. Give it extra-serious thought if your financial situation has improved or interest rates have dropped since you took out your last loan.

Have you taken out an auto loan to pay for your car? You may be able to refinance that loan to lessen your financial burden with any vehicle.

Refinancing a car loan involves taking on a new loan to pay off the balance of your existing car loan. Most of these loans are secured by a car and paid off in fixed monthly payments over a predetermined period of time — usually a few years.

People generally refinance their auto loans to save money, as refinancing could score you a lower interest rate. As a result, it could decrease your monthly payments and free up cash for other financial obligations.

Even if you can’t find a more favourable rate, you may be able to find another loan with a longer repayment period, which might also reduce your monthly cost (although it might increase your total interest cost over the life of the loan).

If you’re still unsure whether refinancing a car loan is right for you, read on to learn about when it typically makes the most sense.

The times refinancing a car loan could make sense

A decision as big as refinancing will depend on a number of individual factors. With that said, you may want to give it some extra-serious thought if:

• Interest rates have dropped since you took out your original auto loan.

Interest rates change regularly, so there’s a possibility that rates have fallen since you took out your original auto loan. Even a drop of 2 or 3 percentage points may result in significant savings over the life of your loan.

• Your financial situation has improved.

Lenders can use a number of factors to decide your auto loan rate, including your credit score and debt-to-income (DTI) ratio, which is calculated by dividing your monthly income by your monthly debt payments.

How to refinance your car loan when you have bad credit

You didn’t get the best offer the first time around.

Even if interest rates haven’t dropped or your financial situation hasn’t improved significantly, it may be worth shopping around for better loan terms anyway. For example, you may have received a loan with an interest rate of 7 percent when other lenders were offering lower rates.

This may be especially prudent if you got your original loan from a car dealer, as dealers sometimes offer higher interest rates to make extra money. To find the best options for loans with low credit, visit TFC Title Loans.

You’re having trouble keeping up with bills each month.

Even if you’re not able to secure a lower interest rate, it may still be worth trying to find a loan with a longer repayment period in order to reduce your monthly payments.

If you can’t find a suitable loan, you may also be able to renegotiate the repayment period on your current loan. However, keep in mind that more time spent paying back your loan is also more time spent paying interest. In general, you’ll pay more interest overall if you have a loan with a longer term.

To learn more, visit: 

https://medium.com/@tfc.moussa/is-it-good-or-bad-to-refinance-1ae541fee64f?sk=59672445360f611bf9f7760e8048bf98

When you’ve gone through the effort of getting a car loan, it can be tempting to simply pay it off and never look back. Before you engage the cruise control, though, consider the potential benefits of refinancing an auto loan.

People typically refinance an auto loan because they’ve found a better interest rate, which would result in them saving money. But there are other situations when refinancing would make sense. The key is keeping an eye out for any of the following situations and being prepared to act.

• Situation 1: You see interest rates dropping. Interest rates on all sorts of consumer loans periodically rise or fall, influenced largely by the monetary policies of the Federal Reserve. The Fed has raised interest rates three times in 2018, but history shows that reductions will eventually come around. When they do, be ready to look for your opening.
• Situation 2: You want to improve on a “dealer-sourced” loan. If you financed your car through the dealership, you likely got a higher interest rate than you could have thanks to something called a dealer markup. A dealer’s preferred lenders commonly charge higher rates, and part of difference goes back to the dealership. Compare your current loan with offers from other sources (your bank or credit union, an online lender, etc.) to see if you can get a lower interest rate with a refinance car loan.
• Situation 3: Your credit score has improved. All those months of diligently paying off your current loan can have a positive effect on your overall creditworthiness. Lenders typically see a good credit score as a sign of a less risky borrower, which in turn can lead to offering better interest rates. If your credit score has improved since you took out the loan, you might be able to save money on interest through a refinance. You can check your credit for free on Bankrate.
• Situation 4: You want to buy the car you’re currently leasing. Car leases typically include an option to buy at the end of the lease. You can get a refinance loan to buy the car outright when your lease expires, although this approach has its pros and cons. If you want to save money on a lease-to-purchase, you’ll need to make sure that the total cost of buying the car, including interest on your refinance auto loan, would be lower than extending the lease or leasing a different car.
• Situation 5. You need lower monthly payments. Sometimes refinancing a car loan is a life preserver, not a windfall. If you run into financial trouble and want to reduce your car payment, you could refinance a loan with a longer term (from 36 months to 48 months, for instance). Although you would pay less per month, expect to pay more total over the life of the longer loan.

How to track refinance interest rates

Most refinance opportunities involve taking advantage of a better interest rate. If you find an interest rate substantially lower than what you’re paying on your original loan, it could be time to get a new deal with a refinance car loan.

To learn more, visit:

https://medium.com/@tfc.moussa/is-it-good-or-bad-to-refinance-1ae541fee64f?sk=59672445360f611bf9f7760e8048bf98

Refinancing your auto loan can save you money in interest or lower your monthly payment. Here’s how to refinance your auto loan.

Locking in a low interest rate should be your first priority when financing a car or when financing anything, for that matter.

Over time, cars depreciate, while the cost of maintenance and repairs add up. Considering the double whammy of lower value and higher costs, it’s smart to pay as little as you can in interest on your car loan.

You might want to refinance your car loan for any of the following reasons: Your interest rate feels disproportionately high, your monthly payments are too much, your original car loan makes it impossible (or exceptionally difficult) to pay it off early, or your old loan used precomputed interest, which means that you’ll pay the same amount of interest regardless of whether it takes you the original four-year term or half that.

It’s also possible that the lending landscape has changed since you took out your loan: Rates might be lower, and your credit may be improved.

It’s also possible you’ve taken a job at a lower salary, or experienced an unexpected job loss, and need to make lower payments on your loan.

Why you might want to refinance your auto loan

We already know lower interest rates are the main incentive for refinancing your auto loan. A lower interest rate can save you hundreds or even thousands of dollars throughout the life of your repayment term. (Don’t believe this? Play around with a car loan calculator for a bit, and see how much difference one percentage point makes.)

Paying interest isn’t throwing away money (if you didn’t pay it, you couldn’t borrow money, and couldn’t buy a car!), but it’s close. I wish I had looked into refinancing my auto loan when I had one because my interest rate was very high. When I started making payments, at least $100 of my monthly payment went toward interest alone.

Another reason why you might want to refinance your auto loan would be if you’ve been having trouble making payments and would like to extend your term or lower your monthly payment.

While extending your term can most likely cause you to pay more interest over the life of your loan, it can make your monthly payments more affordable if your budget or income has changed and you need extra money to cover other expenses.

How to refinance a car loan?

• Check your credit 

You’ve got to have decent credit for refinancing to make sense. If your credit score is low, you may not be able to qualify for a better loan.

• Confirm the details of your existing loan

Before you start shopping around for a new loan, it’s important to understand all the terms of your current loan first. This may mean dragging out all the paperwork you initially received when you financed your car.

• Compare competing offers from different lenders

When you start shopping around and looking at other loans, make sure you read through the details carefully and compare different offers from lenders side by side—as well as next to the terms of your existing loan.

• Ready your loan application

To submit your loan application, you’ll need:

• Basic personal information like your employment status, income, Social Security number, address, etc.
• Information about your vehicle like the VIN number, current mileage, model and year.
• Information about your current loan like your balance and lender name

To learn more, visit:

https://medium.com/@tfc.moussa/is-it-good-or-bad-to-refinance-1ae541fee64f?sk=59672445360f611bf9f7760e8048bf98

More and more people are deciding to finance car purchases in Sacramento, CA and Phoenix, AZ; financing is the wave. According to a study conducted by Experian, 84.9% of new cars were purchased with financing in 2015. In 2016, that number rose to 86.3%. These two state capitals are no different.

To further demonstrate the increasing amount of auto debt in Phoenix and elsewhere we’re in, the study found that the average loan amount on a new car has increased also – from $28, 711 in 2015 to $30, 032 in 2016.

If you’re part of these statistics, you may find yourself in a situation in which your monthly payments are too high for your budget. That’s when refinancing a car loan comes into the equation. This often reduces your monthly payments and may make it easier to pay off the note faster. (You can use this loan payment calculator to determine how much your new loan will cost each month.) Here’s how to go about refinancing a car loan.

When to Consider Refinancing a Car Loan

Before we discuss how to refinance a car loan, we should talk about when you should. It’s important to consider your circumstances and determine if refinancing a car loan is, in fact, the right decision for you.

Here are a couple of situations in which it makes sense to refinance your vehicle’s note:

Your credit score has increased. If your credit score has increased since you took out the loan on your car, you may qualify for a lower interest rate. Lowering your interest rate by even just 2% can save you a lot of money in the long run. Let’s take a look at an example.

Let’s imagine you have an existing car loan for $15, 000 for 36 months, at 5% interest. Your current monthly payment is $449.56. Now, say your credit suddenly increased and you refinanced your loan. You took out a new loan for the $15, 000 but at only 3% interest, for the same 36 months. Your new monthly payment would be $436.22.

You would save a little bit of money each month, which you could then tuck away or use to pay off the loan even sooner than 3 years. But the real savings comes in over the life of the loan.

If you paid off the original 5% loan over the scheduled 36 months, your total payout (and therefore the total cost of the car) would be $16, 184.16. But if you refinanced at 3% interest and paid it off as scheduled? The total cost would drop to $15, 703.92. Simply lowering your interest rate by 2% would save you $480.24. Plus, if you used the monthly savings to pay extra on your loan, you’d save even more in interest over the life of the loan

How to Refinance a Car Loan

If you reviewed your situation and determined that refinancing is right for you, there are a few ways to go about the process.

You’ll apply for an auto refinance loan which is used to pay the existing balance on your current car loan. Your car is used as collateral for the new loan. The new car loan has a fixed interest rate with fixed monthly payments for a specific number of months.

The application process is straightforward. You’ll simply go to your bank of choice and provide three sets of information:

• Personal – This includes things like your date of birth, home address, and other information that verifies your identity.
• Financial – This includes things like employment status, monthly income, and other information that verifies your ability to pay the loan.
• Auto – This includes things like the year of your vehicle, remaining loan balance, and other information that will determine the terms of your new car loan.

At the end, you’ll sign loan closing documents. You’ll also have the option to set up automatic payments from your bank account.

To learn more, visit: 

https://medium.com/@tfc.moussa/is-it-good-or-bad-to-refinance-1ae541fee64f?sk=59672445360f611bf9f7760e8048bf98