If you got caught in a high interest rate when you bought your car, a car refinance may help you get a better interest rate and save you hundreds of dollars a month. Just like a refinance on your home mortgage, a refinance on your car pays off the original loan and gives you a new one at some kind of benefit. The benefits of refinancing your car might include a better interest rate, longer or shorter term, or extra coverage on your insurance or mechanical coverage. A car loan refinance can help you out in many ways.
If you got a car loan when you had bad credit, a car refinance is a great idea. Right now interest rates are lower than ever before. Even if your credit is still recovering, chances are that you can still get a better interest rate. Even 1% can make a big difference. If you can get at least a 1% decrease in your interest rate, then a refinance will probably be worth it. You might have to do a little math to make sure that a refinance will really save you money. There are some situations that don’t end up saving you money, like less than twelve payments to go before you are paid off.
Car refinance has some restrictions. Most lenders will not consider you for refinance unless your car is less than six or seven years old. Refinancing on cars is based on what you still own and not on the value of the car. You will not qualify unless you have at least $7500 still due on your current car loan. Most refinances also are only offered to you if you will be changing lenders. This will include any affiliates of your lender as well.
There might also be mileage restrictions. Most lenders won’t refinance unless you have less than 75,000 miles on your car. If you fit into those requirements and maybe a few more, then car refinance can save you a bundle. Try to find a lender that will offer low or no fees in the process and you will save even more. The whole point is to save money monthly. Be careful that this remains your overall goal, or you may get caught up in other programs and end up spending the same amount or more than you did before.
About the Author: Chris Goodman has been in the auto finance business for more than 20 years and has assisted thousands of consumers with their car loan needs. He is an expert on car refinance and auto loans. Find more information at http://www.OpenRoadLending.com and see how easy it is to get a car loan.