It’s Time to Refinance Your Car Loan – Now What?
Car loan payments too high? Chances are good that it’s time to refinance your car. If you’re not sure what refinancing actually entails, you might think that it’s going to take too much time, or you’re going to have to do a lot of work for little reward. Nothing could be further from the case. You see, car refinancing just means that you’re going to be taking out a different loan that will take care of the original loan that you took out to get your car. This new loan will be at a lower interest rate, which means that you will have a much lower monthly payment than you might expect. You can save a few hundred dollars in some cases, especially if you had to take out a car loan with a huge interest rate just to get a new car worth driving. Once your credit score improves, you should definitely look into refinancing.
There are a few things that you will need to do in order to make sure that you will be able to pursue car refinancing.
First and foremost, if you haven’t pulled your credit report, you should. There’s nothing wrong with knowing exactly what’s on your credit report, and you don’t want to make the mistake of not knowing. Even one piece of incorrect information could lower your credit score to the point where you don’t get the loan that you deserve. It’s better to just push forward and make sure that you’re getting the loan that you need the first time out, so you don’t have to send out too many inquiries in the auto loan shopping. While it’s true that creditors do forgive home or auto inquiries when done in a tight period of time, you still don’t want too many inquiries on your credit report. It tends to hurt your score after a while.
From here, you will need to contact your current lender / finance company and get the payoff balance. Keep in mind this number may be a bit different than what you paid for the car, because it calculates the interest that you owe as well. Write the number down and ask how long the quote is good for. Generally speaking, it lasts for about ten days. After that, you would need to contact the company again and request a new payoff loan quote. It’s very important that you don’t skip this step, because you have to do the total amount in order to fill out any refinancing paperwork.
Speaking of refinancing paperwork, you don’t want to do this offline. Offline rates won’t be as good as online rates, because you want to make sure that the new lender is really fighting for your business. That’s where the power of the Internet comes in. Lenders know that when people shop online, they’re automatically looking for the best rates possible. If you go offline, then the new finance company might think that they can get away with hitting you with a higher rate than what you deserve.
These are the main steps that you will need to take in order to really make sure that you’re going to be able to get the car refinancing that you deserve. As long as you take these tips into consideration, there’s really no way that you could fail!