Refinancing your car loan is a great way to lower the interest you have to pay or to lower the amount you have to pay each month. You can be sure you're getting the best rate on an auto loan if you use online lenders. Follow these three tips before you refinance your car to make sure you get the best terms.
- Plan Your Payments: Decide what you want to do before you refinance your car loan. Do you want to pay less in interest or make a smaller payment each month? Keeping your goal in mind will help you choose the best terms for your needs.
If you want to pay less in interest, you should try to improve your credit score. One easy way to do this is to pay down your credit cards to 50 percent of their limits. You can also get lower interest rates by taking out a loan with a shorter term than the usual five years. Look for a loan with a longer-term if you want to pay less each month. You don't even need to find lower interest rates to lower your monthly payment. But you'll end up paying more in interest over the life of your loan.
2. Be ready for it: Gather all your financial information ahead of time to speed up the refinancing process. If you don't know how much you still owe on your loan, call to find out. Make sure you have the right address to send the check to as well.
If you have a copy of your last tax return, it will also be easy to fill out forms for quotes or loan applications.
3. Compare Quotes: When you're ready to get an auto loan, compare quotes from different lenders before choosing one. Online lenders and brokers will be able to give you quotes right away. Auto loan brokers work with many different lenders so that they can give you more than one quote. Brokers for auto loans try to offer the best rates, so you may find a better deal on one of their sites than on the site of a single lender.
Rates and terms are important to compare, but you should also look at fees and how you can pay back the loan. You don't want to sign a deal that you can't get out of early or change.
