Wednesday, 20 June 2012
When you consider refinancing your car loan, there are lots of options and financial lenders available to you. The options are plenty but you have to do the right kind of research work before proceeding with the loan process. Refinancing was considered to be an uphill task that would add unwanted pressure to the family.
However, it is now a myth and the toughest of economic times have made the lenders understood about the fortunes that car loan refinance have brought for them. They are the only option to get back the loan amount from the borrowers. The lenders have understood the fact that market demands honesty in the business in order to offer competitive rates. There are certain shabby practices followed by certain lenders which might harm you financially.
I have listed out certain features which need to be watched out when you opt to refinance your car loan.
Credit Score: It is highly recommended to know your credit score. It determines the interest rates while refinancing. If the score is too low, you might end up paying higher interest rates that would increase the amount of monthly payment. This would worsen things while refinancing which is supposed to give you more space to breath. Understand the expectations of the market before you apply for refinancing.
Know About Appraisals: Remember that you do not have to pay for any kinds of appraisals during auto refinance. The loan amount is entirely dependent on the amount you owe and not on the actual brand value of the automobile.
Interest Rates: The ultimate objective of refinancing should be to obtain lower interest rates and not on buying time. It helps you to repay your principal amount and save huge amount of money in the long run. Start searching for companies that offer lower interest rates than your existing company. If lenders know that you have approached several other lenders, they might be interested in giving you special packages and will reduce the interest rates.
Hidden Charges: Look for the possible hidden charges applicable during the car loan approval process. The hidden charges might contribute up to 5% of your loan amount. Try to hook out the details so that you can save a large deal of money in this. Make sure that you do not pay for the application process and other processes that are involved in it.
Avoid Ignorance: Ignorance is your enemy. Do not give room for others to cheat you. Many lenders assume that customers do not know anything about the current financial trend and the automobile industry. Do not fell prey to such lenders. Make good amount of research works on the lenders and choose the best one. Make use of the internet and search engines to find out all details that you would require. You can get all sorts of information in a single click of mouse.
By looking at the above said warning signs, you can avoid too many financial problems and lead a peaceful life in the near future.
Refinancing your car loans is a good option to escape from the ill effects of economic recession and low paying jobs. It is easier to obtain such loans even if your credit score is in bad shape. Finding an auto loan lender offering refinancing loans is not a difficult process. There are certain criteria to be met in order to be an eligible candidate to apply such refinance a car loan.
It is important to meet the following requirements.
1- The value of the car must be greater than the loan amount that is applied for.
2- The car must not be greater than 5 years old.
3- The amount owed on the car must be a minimum of $7500. However, certain lenders will have varying amounts when it comes to this aspect.
Benefits of Refinancing:
If you had bought your car with bad credit rates, the credit score must have improved to a greater extent over a considerable period of time. This will have a positive impact on your credit rating. You are now eligible to refinance your car loan with low rates. You have all the rights to negotiate with the lender to reduce the interest rate. This will help you to save hundreds of dollars in the long run. You will be able to save money which can be spent for other expenditure.
What is the Process?
The first step is to take the help of internet in finding the lenders offering car loans at lower interest rates. Get the applications filled and get a quote from them. There are lots of lenders who are ready to do business with you thanks to down turn in the economy. Lenders desperately need their business to carry on. You need to give out basic information such as make and model of the car, your salary details and employment details. You must be a citizen of US and must be above 18 years of age. You have to fill out the VIN details of the automobile.
The most difficult and easy part is in selecting the right kind of vendor. You must choose the lender according to your financial requirements. The best lender can be picked up after a thorough research in the internet.
On selecting the lender, try to have direct contact with the car lenders and arrange for a meeting. Negotiate the terms and conditions so as to gain maximum benefits in the long run. Factors such as high mileage or older model will have a negative impact. You need to be careful in picking up the right deal. Make sure the vehicle shows less than 70,000 miles. Make sure you know every inch of detail about the vehicle restrictions offered by the lender.
The process is quite simple if you are thoroughly educated on this subject. Do your research works properly before approaching a lender. You can start saving money in this way by refinancing your car loan.
Have you bought your car on a loan and find it difficult to repay it now? Do you feel the pain in repaying huge monthly payments in this downtrodden economy? There are many ways to save your money in the long run and I have tried to explain certain facts in this article.
People are trying their best to save money wherever they go and whatever they do. The borrowers can save a lot of amount by auto refinancing which will help them to reduce the monthly payments. For example, if you can save $50 per month on your repayment, you can save a whopping $3000 over a period of 5 years which is a great deal. The next factor to be considered is the interest rates. If you are paying exorbitant interest rates with your current lender and find a golden opportunity to reduce the rates, it is recommended to opt for refinancing. There are several lenders in the market offering competitive rates. If you have already repaid your loan amount by more than half, you can refinance the loan with another lender and reduce the monthly payment with lower interest rates.
There can be millions of reasons on why someone might opt to refinance the car loan. One of the most important reasons is to save money. It is important to choose a reliable lender having cheaper interest rates. This rate will differ according to the lenders and so the borrowers have to do proper ground works before selecting the best. This will help in saving substantial amount of money.
Another important criterion to look upon while refinancing car loan is the financial background. The recent economic recession has made several companies to engage in massive layoff. Millions of people those who have taken auto loans, personal loans have lost their job and find it difficult to repay the loans. Refinancing the auto loan at this juncture might be a valid thought.
Do not simply opt to refinance your auto loan just because somebody recommended it. There must be opportunity to save some money and get relieved from financial clutches. There is absolutely no reason to refinance the loan if you owe very less amount. If you have more than 15 months of repayment, it is wise to consider refinancing the auto loan as a preferred one.
If your financial condition is worsening and does not allow you to repay the loan amount properly, refinance is a wise option. This option should be given a wise thought and a careful analysis should be made. A well defined income and expenditure list should be prepared to reveal the true financial condition of the individuals. This will give a clear picture and helps in making the correct decision regarding refinancing car loans.
No matter what is your motivation to refinance the loan!! This process is quite simple and can be completed in just 2 days of time.
A car is a heaven on wheels.
It is the ultimate American dream. And to make it a reality, you obviously need to avail an auto loan. But are car loans really affordable?
It is for this reason that car refinancing has become a lucrative option. But, you must know that car refinancing is not for everyone. The economy has suffered the worst crisis and everyone is affected by it. Lenders have become more cautious and they consider a few selected cars unworthy for lending.
WHAT KIND OF CAR WON'T BE REFINANCED BY A LENDER?
An Old Beauty
When you refinance your car, you must remember that the rules of real-estate refinancing don't apply. Unlike your home, your car's value depreciates every single day. So, a very old car is generally rejected by lenders.
Another aspect is LTV. The Loan to Value ratio is a depiction of how much you owe vs. your car's current value. Lenders understand that being a depreciating asset, a car's LTV will be higher than 100%. But a very old car will have an exponentially high LTV value. This means there are higher chances of an up-side down loan. So, lenders stay away from cars older than 7 years.
When your vehicle is damaged to the extent that is deemed as a "total loss" by your insurance company, it is given a salvage title. Each State has different criteria for considering a car as salvage or junk.
Mostly if your car sustains damages worth 75% or more, it is given a salvage title. But each State has its own rules. E.g. Florida considers a car as junk if the car damages are worth 80%. Several States also use the salvage title to identify stolen cars.
If your vehicle has a salvage title, its market value will be very low. This will increase the LTV ratio. Lenders usually stay away from refinancing such cars because of the higher risk involved.
To refinance, your vehicle must have a clean title. Now, the title will obviously have lien against it, as you are still to pay off your old loan. But by no means, the car should be severely damaged, stolen or repossessed. It is also important that the odometer shouldn't be rolled back.
Have you altered your car to enhance its performance? Have you worked on its engine? Have you customized it according to your style?
Well, it means you have modified your car. Such cars fetch less value in the market.
The reason - Would you like to buy a car that doesn't go with your style? The answer is in negation, isn't it?
Everyone has a personal choice and no one will want to ride in a car stylized by someone else. So, lenders are clearly less interested in a customized car.
If a car is used for business purpose, it's obviously driven for longer distances and is constantly being used for heaving heavy equipments. More use causes rapid depreciation in a car's value. This means the car won't be useful as collateral.
In this scenario, you cannot really blame the lenders for not refinancing you.
So, these are few of the car types which face problem in the refinancing market. But it is important to understand that nothing is black and white. A lender may be impressed by your income and financial stability and decide to refinance a car. Another lender may decide to refinance your car even if it is eight years old and someone will reject even a four year old car.
So, I would like to tell you that never lose hope or get discouraged. All you need to do is search for a lender who will accept your application. And the best way to do it is by using the web.
Don't wait anymore; get a low rate car loan at the earliest. Emancipate yourself from an agonizing loan today!