The holidays can be stressful. Money gets stretched between wants and needs, gifts and bills. Afterward, it can be especially rough if you’re paying too much for your auto loan. That’s why now may be a good time to refinance. If you have questions about how to take advantage of low interest rates and refinance offers, you’ll find a few answers below to help you get started.
- What is an auto refinance loan?
An auto refinance loan pays off your existing auto loan, much like mortgage refinancing. But refinancing your vehicle is a much faster, simpler process.
- How do these loans work?
Your new lender pays off your old loan and the title to your vehicle is transferred to your new lender.
- Why refinance my existing auto loan?
Refinancing your auto loan can lower your interest payments or decrease your payments by changing the terms. People typically refinance when interest rates are low to reduce their interest costs. You can also lower your monthly payments by extending the term and breaking the payments up over an extended period of time.
- Are there any fees associated with an auto refinance loan?
Yes, but they’re not excessive. You’ll typically pay a fee of $10 or less to transfer the lien. There’s also a state re-registration fee, which can range from $5 to $75 depending on the state. As always, every situation is unique; fees may vary by lender or state of residence. Ask your lender if they have any pre-payment fees before you refinance your auto loan.
- How much will I save by refinancing my existing auto loan?
Your savings will depend on three factors: the remaining balance of your existing loan; the difference between your old interest rate and the new interest rate; and the terms of your new loan if you choose to extend it.
- Are auto refinance loans popular?
Absolutely. Check around to learn how much money you can save!
Posted By Scott Rothbort at April 18, 2012