Refinancing an Auto Loan

by FREDA ATKINS

Has refinancing your current auto loan ever crossed your mind? Refinancing definitely has its benefits; such as getting a lower interest rate, thus lowering your monthly payments. A refinance can also reduce or extend the length of time on your loan.

Unfortunately auto loan refinancing is not in everyone��s interest. There are certain requirements that you have to meet in order to refinance, which vary by lender. Generally your vehicle loan cannot be an upside down loan, which means you cannot owe more on your vehicle than what it is worth. Secondly, your vehicle can not be more than 5 years old. Also, the balance owed on the loan must be more than $7500. If you meet all of these requirements then you need to make sure your credit has improved since you took out the original loan. If this is the case, refinancing would definitely be in your best interest as it would more than likely benefit you in most or all of the ways we discussed before.

Once you have decided refinancing your auto loan is going to benefit you, you need to call your current lender and get a pay off amount, and then start shopping lenders. With today��s technology, you can apply for refi loans, as they are called, online! These companies usually require very detailed information about your loan, your car, and your credit history.

Thus, it would be a good idea to collect all of that information and have it in a handy spot while you are loan comparing. As with any major financial decision, you should research a handful of companies and then get 3 or 4 quotes. The more energy and time you put into researching your lenders and current loan situation, the more you will know about what you need and should qualify for. Each company varies in what they offer, so please be sure to do your homework, and never be afraid to ask questions.

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