Do you have a car loan that you’re looking to refinance to save some money each month? Do you know what to have when you meet with a lender? Well, the goal of this article is to give you a few tips that you can keep in mind to make your car loan refinancing experience a good one so you save money from the deal.
1- Is it Worth it?
What is the magic point where the cost of refinancing your car loan will be more than the benefits? You need to know where that point is. In the end it will depend on how much you’re currently paying and what you new payments will be. But generally speaking if you owe less than $7500 you probably shouldn’t bother. In fact, there’s a chance that the lender will not even want to do it unless the loan will be worth more than that.
2- Keep Information Consistent
You’ll run into fewer problems if you remember this: the information on your new loan has to match the information on your old loan. Keep the same spelling of your name and everything else. So if you go by Bob normally but put Robert on your previous loan, make sure to put Robert on the new loan as well. This is to avoid computer errors and other problems that could come from that.
3- Loan Value
The amount of the loan should not increase. It definitely shouldn’t be worth more than the current sale value of the car! Many car loan refinancing lenders won’t let you take out more than the car could sell for, so do your homework on this beforehand. Have the numbers ready for when they ask.
4- Accurate Information
This one should be obvious, but you’ll want to make sure that all the information you have on the vehicle is accurate and up to date. The lender will want to check the value of the car to make sure that it fits what I mentioned in tip #3.
5- Watch Interest and Fee Rates
Don’t forget that the whole point of car loan refinancing is to save money. So when you see your new interest rate, fees, and the new monthly payment you need to make sure that you’re actually saving money. The amount of savings will of course depend on the size of the loan, but you should be able to save at least a couple hundred dollars a month by doing car loan refinancing.
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