Although Government Federal Reserve Bank Interest Rates are still at an incredibly low rate, the percentage of interest governed by that Governmental body usually has much more of an impact on homeowners than car owners. But that still doesn’t mean you can’t be just as smart with your car financing as you can with that of your home by refinancing at a lower rate with you lender. Now, how does one go about doing that exactly?
Tips for Refinancing a Car
Well, first off, find the folder where you keep all of your car’s old bills, repair receipts and pertinent information about that particular vehicle you may want to pay a little less for each month. Now, if you don’t have a shred of information, lost it or your dog ate it, then you will just have to wait to do step two of this process until your next car payment bill arrives in the mail. And if you do need to wait a month, seriously, look into buying a file where you can store all of your automotive related paperwork together in one place where you can easily find it.
Essentially, car refinancing is the act of paying off the remainder you owe on your car loan with money from another loan that has a lower A.P.R thereby saving you what could become to a considerable amount each month. You could possibly save hundreds each month and thousands each year if you do some legwork and shop around for a “new” (meaning different from the one you have now) car loan interest rate and A.P.R.
Due to recent credit upheavals, many recent car buyers were forced into car loans with unnecessarily high finance rates like A.P.R and interest charges per month so it can really pay off too look into refinancing your new car. Most lenders don’t offer refinancing with their own car loans so you will have to switch lenders if you do refinance your new car. So if you have a good relationship with the company that is your traditional bank of lender, remember, you don’t have to refinance your car. To some, loyalty is a more valuable asset than extra cash each month.
But there is one very important thing you need to remember when looking into refinancing your current car, truck, SUV, motorhome, boat or mechanized lawnmower. You will not qualify for a lower rate if your credit rating is still in the pits. Now, it’s understandable if you are out of work or have hit hard economic times not to be able to pay off ignored debts from college-era credit cards. But maybe you didn’t really need that extra flat-screen TV with the swiveling wall mount for your bathroom now did you?
Just by skipping one or two frivolous large purchases a year, you can set aside enough money to really start to have an impact on your credit score by paying off the delinquent black marks that are currently sullying your credit reputation and possibly might make it impossible to refinance your car loan. You know if you put off buying a flat screen one or two more years there will be a newer, clearer and better technology available to buy so why buy one now? Do the smart thing and pay off some of your credit debt so you can refinance your car loans.