Does the cost of auto refinance outweigh the costs saved with the new deal? If you were to reduce your monthly payments this would most likely be offset by an increase in the length of the time taken to pay off the loan.
How much of your existing loan is already paid off? If you have paid off the greater part of, then it might not be worth refinancing a car loan.
Check how much your car is worth on the open market. Refinancing providers are unlikely to lend more than the present value of the vehicle.
It is important to compare and contrast interest rates offered by the various providers.
If it was a while since you took out the original finance then be prepared for the more stringent rules which lenders now apply to borrowers. You may well have to provide more information about your finances than you would have had to previously.
To qualify for the most favourable interest rates you will need a good credit score, and be up to date with the payments on the existing loan.
If you do decide to refinance a car, it is important to take the time and effort to read the accompanying documentation carefully, paying particular attention to the small print.
One of the issues to be aware of is to focus on the interest payable not the APR. Contracts with low APR percentages look good but it the guaranteed buyback amount is high the actual interest paid can be high at that is really what is important. If a substantial capital payment is left to the end of the contract even a low APR calculated on that balance can cost quite a bit.
So you have a fixed rate now, and crummy cdeirt, but would like to get a better rate. Do I have that right?Well, you can apply to refinance, but your rate will be based on your current cdeirt. Plus you’ll have to pay all the closing costs again, which could be a few thousand dollars. In addition, many lenders will not lend as high a loan-to-value amount on a refi. If you borrowed 90% of the purchase price or more, you may not find a loan at all. It would be better to work on your cdeirt, and build your equity for a couple years. You don’t know what the rates will be in the future, but it will probably not be to your benefit to refinance now. Call around and see what they have to offer. Many lenders will refund application fees if they can’t make the loan you want. What I mean is, they don’t know the rate until your cdeirt is pulled. If the standard rate is 6% and once they pull the cdeirt the best they can offer you is 7% and you don’t want it, you’ll get a refund. Anything other than the standard rate is a counteroffer. Be sure you know in advance how they deal with app fees and refunds.