Okay, so the car loan you received has a very high interest rate and you notice that there are better car loan packages available. With the economy going up and down the way it is, many loan companies and credit corporations are able to offer those consumers with good credit lower interest rates. If you wound up with a car loan that is at a high interest rate, you may look to car loan refinancing to help.
Often times young consumers wind up paying a higher interest rate because of either no credit history, or not enough history. This means that their first car loan could be at a pretty high interest rate. It’s important for these young consumers to understand that once they have paid on their car for a year or so, there’s a possibility they can refinance their car package at a lower interest-rate and possibly save thousands over the length of loan.
The same can be said for many other refinancing packages. Whether it’s a mortgage, property package, or even some credit card companies, as soon as you’ve proven a credit history and that you pay your bills, refinancing or finding better interest rates can really save you some money. It’s easy to refinance, but remember that most refinancing packages or going to charge you loan fees. You have to weigh the interest rate difference against those fees in order to find out if you’re going to come out ahead with a lower interest rate.
If you’re a young consumer and have received car financing and been paying your car payment for a while, go to your financial institution or the bank you have your checking account with and talk to them about refinancing your car. Car refinancing, if you have good credit history, is a great way to possibly save thousands over the total cost of your car. It’s important that you take advantage of any lower interest rates that may be available to you through refinancing for your vehicle loan.
Unfortunately, for those who have bad credit or who have been unable to make their payments on time, credit refinancing is going to cost you quite a bit more money. Although it may help in the long run, especially if you can borrow enough against your car to pay off your credit card debts, the interest rate is going to be quite a bit higher on your car refinancing package than someone whose credit history is good.
Remember, car refinancing is a way to get a lower interest rate and save money over the length of your loan. Make sure you thoroughly understand any refinancing package contract terms, as well as repossession terms and refinancing interest rates.
Watch the video related to refinancing mortgage
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Help answer the question about refinancing mortgage
Would it be better to pay large lump sum to current mortgage before refinancing?Currently looking at refinancing home, but can't decide if it would be better to add additional monies to current mortgage to lower amount to be refinanced, or refinance and put that sum onto new mortgage.
I am not sure about the RateGenius.com as I have no experience with them. But you seem to have a decent credit score so why don't you get in touch with one of you local Credit Union(s) and they can give you better rate then what you have.
Here is where you can find out about your local Credit Unions:
1. http://www.creditunionsonline.com/
2. http://www.creditunion.coop/cu_locator/index.html
Good Luck.
-N
PS:
Also next time you buy a used car – try following places.
I would recommend looking for car using the links below:
1. Toyota.com Pre-Owned site.
These are certified vehicles and comes with warranty and road side assistance.
http://www.toyota.com/html/tcuv/index.html?s_van=GM_STN_TCUV
2. Carmax.com
This company gives a No-Questions asked 72 hours refund.
3. Carsdirect.com – to check out local inventory
The interest on a used car loan is significantly higher than a new car. Sounds like your at the top of a long slippery financial slope. If your in a situation that makes you consider a loan to pay off a loan (car and credit cards) you are not in a situation to consider a new vehicle in the next few months or refinancing your home next year. Calculate you total indebtedness, how you will pay it down, then think of a loan if REALLY needed.
Refinancing is very difficult with used cars because so often the owner is upside down in their loan.
No bank is going to loan you more than the car is worth. You must have equity in the vehicle in order to refinance it.
Refinancing is essentially repurchasing the car with a new loan. If your credit has improved over the last 2 1/2 years and you qualify for a lower interest rate you can lower your payment. But it takes several percentage points to make any real difference. A $10,000 loan for 4 years at 6.5% is only $11.00 difference a month than the same loan at 8.5%. Plus there will more than likely be fees the lender wil charge you for processing the refinance loan that will cost you cash out of pocket. Plus you have to consider the length of the loan. You've already had your current loan for 2.5 years and you probably still have 2.5 years to go. If you refinance and increase the length of time it takes to pay off the loan you must consider the additional interest you'll be charged for the extra payments. In the long run you may not be saving any money at all, in fact it may cost you more by the time the car is paid off.
If you are struggling with your monthly bills I suggest you sit down and create a monthly budget and find a way to pay the bills and not fall behind. Write down every dollar you earn. Then write down all your expenses listing the most important ones first. (Rent, utilities, food etc…) Figure out where the money goes and you'll find a way to make this work.
As long as you are not taking out additional equity from your home (you will owe the same amount at a lower or a fixed rate), your refinance shouldn't effect your credit (except for the hard credit inquiries your lender will make up until the loan closes). If you had good credit to begin with, it should be fine.
If you are increasing the amount you owe, it may adversely effect your credit scores. The car loan itself may also negatively impact your credit score depending on your overall credit availability, total borrowed amount and ability to pay (based on your income).
Modern car loans from reputable financial institutions should be made with simple interest – you pay a portion of your payment is interest and a portion is principal each month. That being said, EVERY DAY THAT YOU HAVE MONEY BORROWED AT A HIGHER INTEREST RATE, IT IS COSTING YOU MORE INTEREST. Make the large payment on the higher interest loan now and next month you will be paying more toward principal, and the month after that you will be paying more toward principal.
Now when it's time to re-finance, you don't have to take out as large of a loan, which in most cases reduces your loan origination fees and taxes that are often charged, and you continue that smaller loan at a smaller interest rate.
when you go to the bank for the refinance they will get a current payoff and cut a check for it…and no…thee should be no fees to refinance
Try other local banks, credit unions, and online sources such as eLoan.com and CapitalOne.com. Unless your credit score is very low, you should be able to do much better than 17%. If you are upside down on your loan, you may have to come up with some cash to refinance. A bank or loan company won't want to lend you more than the car is actually worth.
You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments – credit-report-free.totalh.com