Day in and day out, one new model of car is rolling out and the desire for owning a vehicle has become irresistible for people. But the finance stands in the way as a hurdle. Finance companies assist people who are desirous of owning a car and offer auto loans at affordable rates. As there are many companies that offer auto loans, it become imperative to do a thorough research to find the loan that is best suited to the individual. The interest rates for auto loans differ from one company to another and if the right loan is not chosen, people may end up with paying high interest rates. Auto loans are of two types, namely, secured auto loan and unsecured auto loan. Generally, the interest rate for the unsecured auto loan is higher. But before applying for an auto loan, it is vital to know the current auto loan interest rates which determine the actual payment. Basically, there are four different kinds of auto loan interest rates, namely, for 36 months, 48 months,60 months and 72 months and the interest rates between them fluctuate between 6. 5 percent and 14 percent or even higher. Though the location of buying the car also has an influence on the interest rate, normally, the lower the number of months for the auto loan, the lower the interest rates. A used car loan carries a slightly higher interest rate than for a new car. The auto loan interest rates can be either fixed or flexible. Fixed rate of interest is suitable for those who want to play it safe and flexible rates of interest is the type of auto loan interest that changes based on the changes in the market. Thus, it would be suitable for those who are bold enough to undertake risk. Financial companies that offer auto loans fix the interest rate taking into account factors like the total amount of finance, the credit score and the financial status of the borrower. Refinancing auto loan is also a way of lowering the interest rates on auto loans. The amount thus saved can be utilized to buy the accessories for the automobile. Normally, a down payment of 25 percent of the cost of the car has to be paid for every auto loan. If the amount of down payment is increased, it reduces the interest rate on auto loan. The interest rate also depends upon the cost of the car. An expensive car will carry higher interest rates. Since there are many options available, it is better to make a thorough research of the lender and the interest rate before applying for an auto loan and the best place would be nothing but online which is a good source of information and it saves a lot of time and money and offers a wide variety of comparisons.
Posts Tagged ‘Refinancing Loan’
Factors Influencing Auto Loan Interest Rates
December 31st, 2009When Considering an Auto Loan Refinance, Do Your Homework!
December 28th, 2009So you financed your car through a dealership and are paying outrageous interest on your auto loan. Your payments are through the roof and your interest rate is too high. At the time, the finance guy at the dealership told you this was the best he could do for you because your credit wasn’t great. This probably wasn’t exactly true, but this is how auto loan finance people make their money- they tack on extra interest to your loan and get a little extra for them in the process. The good thing is that you’ve been making your payments on time and now your credit doesn’t look so bad, so why are you still paying the high rate that your car dealership finance guy stuck to you? He made some money off of you by adding a couple of points to your interest rate, so now it’s time for you to take back your financial freedom and lower your interest rate on your auto loan by refinancing at a lower rate. By refinancing on your auto loan, you can get a much lower rate on the amount you still owe on your auto loan and wind up saving up to $100 monthly. That can add up to $6000 dollars over the life of the loan, which can mean really big savings for you. Not to mention that since the federal rate is so low, the chances that you will drop your auto loan interest rate by at least a couple of points are high, so you should very seriously consider refinancing your auto loan at a lower rate. When you’re having trouble making your monthly auto loan payments, but your credit is still okay is when you should be taking steps to refinance your auto loan. This time around, you won’t go through a dealership to get your auto loan refinance, you will go through one of the many direct lenders who deal with auto loan refinance to get a lower interest rate and a lower monthly payment. Then the next time you buy a car, you will use your borrowing power differently and not let your financing needs fall to the finance guy at the dealership, but you will secure an auto loan on your own, with a decent interest rate that you will never have to refinance. You shouldn’t refinance your auto loan at a lower interest rate if you only owe $2000 or less, because you’ll just set yourself back by extending the term of your loan, but if you owe more than $5000, you would definitely profit by refinancing your auto loan if your have a high rate. Remember, the goal with an auto loan refinance is to get a lower interest rate than you secured with your previous lender and lower your monthly payments by adjusting the current terms of your auto loan refinance. You hopefully can lower your payments by as much as $100 monthly, which can really go far in an economy where every penny counts. Don’t wait, refinance now before you run into trouble paying your current high interest auto loan.
Speedy Auto Refinancing
December 24th, 2009Auto refinancing is one of the best ways to save your money. The concept is similar to home refinance. When refinancing auto loans, you pay off your current auto loan with a refinancing auto loan from a different lender that has a lower APR. Refinancing auto loans makes your monthly auto loan payments much less, and your interest rate drops, which can allow you to pay off the balance of your auto loan even quicker. With dropping interest rates auto refinancing has become a very popular trend.
You can speed up the process of auto loan refinance sanction by following various points. By paying a close attention to these points the chances of your rejection can be minimized.
The names used in auto refinance loan applications need to be the same names with exact spelling as the names on your current auto loan. This is important because that is how your current auto loan is identified and found. Keep your auto loan account number ready. If you give them a name with a different spelling and they are not able to find your current loan, you can get rejected.
You must refinance more than a fixed amount, which currently is $7500. If the amount is less than this it’s not worth the auto refinance company’s time.
It’s also important to have all the vehicle information accurate so that loan refinancing lender can price out the auto to make sure it meets Loan to Value ratio guidelines. Enter the year and model and enter the 17 digits VIN (Vehicle Identification Number), found on your dashboard or registration.
The auto refinance loan amount should not be higher than the value of the auto. Just like home refinancing, where the bank won’t lend you more than the value of the house. You might want to check your values first to make sure your auto has retained a reasonable amount of value relative to the amount you still owe on it.
Online refinancing of auto loans is quite easy. Follow these steps to refinance your auto loan:
Enquire from your current auto loan lender about your auto loan payoff amount.
Check online for the existing ARP according to your credit score. Apply online if prevailing APR offered is at least 1% less than your current auto loan APR. Be sure to enter your vehicle’s 17 digits VIN from your registration, and enter your name as it appears on your current auto loan.
You will get auto refinance loan approval in an hour; they email you instructions on how to payoff your current auto loan.
Inform your bank about the refinance lender as your new lien holder, and they should send the title to them, not you.
After this step you may have to pay your state a fee of $5 or more to transfer lien holders. But then this is worth it when your savings an ample amount of dollars.
Your loan can be refinanced in 2 days after you apply. .
