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Refinance Car Loan
If you're looking to refinance a car loan and you're not really sure where to start, then take a few minutes, give this a read and afterward you'll know enough information to go through with it if it still sounds like something you'd like to do. Refinancing anything is never an easy decision, but it's always a great way to give yourself a little bit more breathing room when it comes to your monthly expenses and personal finances. Although refinancing your car or auto isn't the most common way for most people to ease their financial situation, it's becoming a more popular every day as more and more people are feeling the economic crunch.
In the following sections we'll be covering these four main topics:
- Refinance Car Loan Or Home Loan?
- Refinance Car Loan With Bad Credit?
- Refinance Car Loan Hidden Fees?
- Refinance Car Loan Savings?
Once you have read through these sections, you should have a much better feel for what car loan refinancing is all about and whether or not it's a good opton for you to consider.
Refinance Car Loan Or Home Loan?
If you are trying to decide which is the better option, to refinance a car loan or a home loan, there are a few differences that you should probably be aware of. First of all, the one thing that's probably most important in this whole process is your credit score, which will basically determine whether you are eligible for a loan or not and if you are eligible what rate you will be given. This is the same for both home and car refinancing and should be given some serious attention before beginning this whole process. Don't worry though, if you don't have great credit I'll tall you some ways to improve your chances for a refinance car loan in the next sections.
The next thing for you to keep in mind is that a refinance car loan isn't tax deductible and a refinance home loan is, which could mean some serious savings during tax season if you went the home route. But, there are some additional costs that go along with getting a refinance home loan that are excluded from refinance car loan such as getting an appraisal before the refinancing can begin.These smaller costs can begin to add up in the long run which might make the car refinancing a better option for you.
Finally, if you're in somewhat of a hurry then dealing with a refinance car loan is going to much easier and much quicker than the things that you'll have to include in a home refinance loan. For instance, there is no appraisal needed for a refinance car loan because Kelly Blue Book is the authority on determining values for cars and autos. These differences really speed up the refinancing process with a car, making it a much quicker option than that of a home.
Refinance Car Loan With Bad Credit?
Having bad credit is never a good thing, but sometimes it's something that we just can't avoid and have to deal with. But, don't worry too much because even if you have bad credit you still have a chance to get a refinance car loan thanks to sub-prime and high-risk lenders. These special lenders have experience in dealing with bad credit, will be much more willing to deal with you as a customer and will have a much better chance of getting you refinanced.
Even if you've had some issues with your credit in the past, most sub-prime and high-risk lenders will still consider working with you unless your credit history shows specifically that you've had issues with skipping or making late car loan payments. Besides these few specific differences, getting a refinance car loan with bad credit is exactly the same as getting one with great credit. Be sure to check out your various options and compare the different rates that each lender offers you and you'll end up with a deal that you're happy with.
Refinance Car Loan Hidden Fees?
With a refinance car loan you normally have much less fees and extra charges than you would expect, but you need to beware of lenders that try to add a few extra expenses here and there that they hope you won't notice. An extra charge that you'll sometimes see is an application fee that is normally no more than $20 or $25. But, if you do find a lender who is charging this fee (like an Internet lending company), keep on looking at other options because it should be easy to find one that doesn't charge you.
Other fees that might be a little more common are processing fees and depending on where you live you might need to fork over a little bit of cash to your local department of motor vehicles. This is because once your refinance car loan is approved you'll need to get a new title. Also, be sure to search the fine print in your original loan for prepayment penalties, which you might get hit with since you're paying off your loan early and replacing it with a new one.
Refinance Car Loan Potential Payment Savings?
As far as potential payment savings go, a refinance car loan can end up lowering your monthly expenses quite a bit if you can manage to either get a significant extension on your payout schedule or drop in your interest rate.
By extending out your payout you'll be required to pay off your car for a longer period of time, but you'll be making lower payments, which can help out a lot with your monthly cash flow. By locking into a lower interest rate with a refinance car loan you'll still be making the same amount of payments, but each individual payment will be smaller since the overall interest rate is lower. If you'd like to see a few examples of how this works, I wrote another article specifically on car loan refinancing that is probably worth taking the time to check out.