It can be hard to shop around for car loans because there are so many different lenders. But you'll find that it's getting harder and harder to refinance car loans these days, so taking a little time can save you money. When you refinance a car loan, a small change in the interest rate can make a big difference. Comparing different car loans will make it easier to find the best interest rate.
Always remember that refinancing a car loan is about more than just the interest rate. When comparing rates from different lenders, you should also compare the points that come with them. When comparing lenders, you should also compare the fees that are related to the loan, since the other fees are usually not related to the lender.
Also, when comparing refinance car loans from different lenders, you should look into and compare all of the loan's features. Pay close attention to whether or not there are prepayment penalties and whether or not you can convert the loan.
Lastly, find out how long the interest rate and points quoted to you will be locked in for each refinance car loan you are comparing. There are lock-in periods of 30, 45, and 60 days. Some lenders only let you lock in your rate for a short time, like 15 days. The price of a refinance car loan goes up when the lock-in period is longer. The lock-in period should be long enough to let the deal be settled before it ends.
If you refinance your car loan, you might be able to get a lower rate. Refinancing a car loan could also give you some extra cash. If you got a car loan in the last 18 months, you might be able to get a better rate if you refinance it. Back then, you might have been so excited about buying a new car that you didn't pay attention to the financing deal. Instead, you might have been more interested in the car's colour and leather seats.
When you apply to refinance your car loan, you have nothing to lose and can only save money. Here are some easy ways to decide whether or not to refinance your car loan:
First, you should ask yourself what you want to get out of refinancing your debt. Are you trying to find ways to pay the least amount of interest possible? Would you like a different way to pay for it?
Second, think about your credit as if it were real. If you have good credit, will you be able to get the best refinancing deal? Before you try to refinance your car loan, try to get a copy of your credit report.
Third, look over the loan you already signed again. Find out how the interest rate on your loan is calculated. For a loan with simple interest, interest is added every day based on the amount still owed. If you don't have a penalty for paying off your car loan early and plan to keep the car for a few years, it makes sense to look for a lower interest rate.
Fourth, compare the terms of your current loan with the terms of the new loan to see if you will really save money.
It's important to know ahead of time what you'll do with any extra money you save each month by refinancing your car loan. If you keep sending in the same amount as your original loan payment, you'll get twice or even three times as much out of a refinance car loan because the principle will be paid off much faster. If you only send the minimum, you will pay less each month, but you won't get out of debt faster by paying off the principal faster.
