Refinancing Automobile Loans

Over the course of your automobile loan, a high interest rate can add thousands of dollars to your total financial outlay. Although interest rates are negotiable, many consumers fail to haggle with their dealer for the best possible rate. Instead, the average car buyer focuses solely on the monthly payment, ignoring that the high interest rate will result in the payment of significantly more money than merely the negotiated purchase price of the car. Unless you refinance your vehicle loan, you can be potentially locked into paying these higher rates for the duration of the loan.

The first step to refinancing your vehicle loan is to track the prime rate and determine when interest rates will be on the decline. The prime rate is an index rate upon which interest rates for mortgages, credit cards, savings accounts and vehicle financing is tied. As the prime rate declines, often due to government action or market fluctuations, the available interest rates from banks and other financiers will similarly decline. Timing your search for a lower vehicle loan interest rate until the rate declines can increase the chances of finding a better rate.

Before applying to refinance your vehicle loan, it is imperative that you check your credit report for discrepancies and attempt to pay down existing debt. A higher credit score, determined by low credit utilization and on-time payments, among other factors, will encourage creditors to approve your loan at a lower interest rate. Lower rates are provided to consumers who demonstrate lower amounts of risk. A borrower with a high income, low debt and history of on-time payment will be considered a low-risk borrower and will be offered a higher quantity of credit at a lower cost.

Once you have taken these steps, it is time to shop around for better auto loans with bad credit. Contact your bank or credit union and ask about the process to refinance your vehicle loan. Apply for several poor credit car loans at once to decrease the effect of credit shopping on your credit score. Ask friends and family for recommendations about banks or other lenders who offer reasonable terms on automobile financing. Apply for loans from as many banks as possible to increase the possibility of garnering the lowest interest rate for your vehicle loan.

As offers arrive, compare them based not only on interest rate, but additionally on the basis of the amount of credit being extended, the length of the loan and any other terms that may be contained in the loan offer. By carefully evaluating these offers, you will be in a better position to refinance your vehicle loan intelligently and with the best possible information. Once you accept an offer to refinance your vehicle loan, carefully review the terms and follow the procedures carefully to ensure that your loan is processed properly. Follow these steps and you are guaranteed to save hundreds or even thousands of dollars — putting more money in your pocket and decreasing the length of your loan. Refinance your vehicle loan today to reduce the burden on your budget — and remember to negotiate the interest rate of your next car purchase! Automobile title loans are also available for people that need to get funds in a hurry.