By Carrie Reede
Refinancing your car loan may be a smart move if you received a high interest rate. A high interest rate is generally indicative of some credit problems. While obtaining a rate that's a few percentage points higher than current trends may not seem like a big deal, it may cost you an addition $30 to $50 a month. To save money on your auto loan, improve your credit, and then consider refinancing for a lower rate.
What is a Refinance?
A refinance creates a new loan, which in turn replaces the existing loan. You may incur a prepayment penalty fee and a title transfer fee. Before agreeing to refinance, carefully weight the advantages and disadvantages. If the savings are marginal, refinancing may not be the best option.
When to Refinance?
The perfect time to refinance your auto loan is when your credit score has improved and when you have been paying on the existing loan for at least a year. After applying for a new auto loan, lenders will review your credit. Your credit score is a big factor is deciding the interest rate. Good credit applicants are offered great rates, whereas bad credit applicants must pay higher fees. Before refinancing, check your credit report. If you credit score needs improving, put off refinancing until you resolve credit issues.
Article Source:
http://ezinearticles.com/?How-to-Refinance-Your-Auto-Loan-Online&id=100276
Tags: Car
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