Car Loan Refinance - A Way to Make a Big Impact On Your Payments

Car Loan Refinance

It's easy to overlook the cost of a car loan with mortgage rates grabbing all the attention. Mortgage interest rates are not the only finance terms looking attractive these days. Rates on automobile loans have edged lower, and car buyers who didn't get the best finance terms in the past year or so can save by refinancing their loans.

Let's say you're paying 12 percent on a $18,000 loan. The average term to refinance a three-year old car right now is below 8 percent depending on your credit history, according to leading online sources. On average, refinancing would save you about $30-$50 per month. That's over $2,000 over the life of a typical four-year loan.

How does car refinancing work?

Refinancing an existing car loan is easier and cheaper than refinancing a mortgage. There's no need for an appraisal, and borrowers can most of the time determine out if they've been approved within an hour of applying online.

If you decide to accept and give, the lender will need some paperwork to complete the process, including copies of the car's title and registration. You'll also need to give documentation of the amount of the loan, dandy balance and interest charges interest rate. Once the paperwork is in hand, the loan most of the time might just be refinanced in a day or so.

As with any financial matter, you'll want to be mindful of fees. Expect costs to transfer the title of the loan and re-register your car.

Fees vary by bank and state, but the total cost shouldn't exceed $25 in most states. There may be additional fees depending on the lender. A leading lender charges a $200 processing fixed cost. But this includes the choice to have the bank file the title transfer with the DMV for you. Unlike refinancing a mortgage, the cost of refinancing an auto finance is rarely a deal breaker.

Who can get car refinancing?

Lending standards remain tight, but if you qualified for a new auto finance in the past year or so, refinancing shouldn't be a terrible.

The standards vary, but banks have minimum requirements on the car's age, mileage and other finance terms. At some lenders, for example, cars cannot be more than seven years old or have more than 100,000 miles. Most banks also requires that there's at least $7,500 left to be paid on the loan.

The specific finance terms you're offered will depend on your credit score. Average finance terms now range from 4.25 percent for the very best credit scores (720 and above) to 18.5 percent for bad scores (below 590), according to Yahoo's Auto Finance Center.

To start finding out what is available, go on the internet to OpenRoad Lending. There you can discover everything you need to take your second car financing or refinancing. You may even discover car loan financing calculators and negotiation tips to use with the dealer. 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 refinancing and auto loans. Find more information at http://www.OpenRoadLending.com and see how easy it is to get a car loan.

Car Loan Refinance