Refinancing an Auto Loan
Refinancing an Auto Loan
Mortgages are not the only types of loans which can be refinanced, but also auto loans. Unfortunately, the majority of the public are not aware of it. The survey, conducted by CarFinance.com, emphasizes that refinancing an auto loan is feasible and may be worth anyone’s time.
The survey by CarFinance.com had 2,000 adult respondents in the months of June and July 2012, and discovered that 63 percent of the respondents are not aware that they could refinance an auto loan. Moreover, 12 percent of the respondents said they had previously refinanced an auto loan.
While it is still a bit difficult to get credit, at present, it is less difficult to get a loan than in the previous year. The following is a guide to assess whether or not you should refinance an auto loan.
First, if an auto loan comes with rigid pre-payment penalties, then it’s not a good time to refinance, especially if you have a small balance and you are not capable of making large monthly payments.
Second, make sure to assess your credit by getting your free annual report from the three credit reporting agencies – Equifax, Experian, and TransUnion – through visiting AnnualCreditReport.com. Check if the information are accurate, and if there are errors, dispute it.
In addition to getting your credit report, getting your credit score is also important. If you have a good credit report and credit score, then you will more likely benefit from refinancing.
Third, look for a number of auto loans from different banks. It is better if you have a lot of options or a wide range of quotes. Websites such as LendingTree.com allows you to file an application to many lenders all at once.
Fourth, do not rely on the figures given solely by the bank, but you should also use an auto loan calculator to compare your existing payment schedule with your recent one. On a positive note, refinancing an auto loans does not include expensive application fees or closing costs, unlike refinancing a mortgage.
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Filed under: auto loans • car loan
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