Refinance A Car

To refinance a car loan, a borrower could end up saving tons in interest over the old loan. It will take only a few simple steps to check out the options. The first step is to gather information about the opportunities available. There is a plethora of auto loan companies on the Internet who offer these types of loans. A person simply fills out an online application to see if he qualifies for the loan. The answer usually comes within minutes. A second step is to compare the terms of the new loan with the old one. Even if the current automobile loan is two interest points higher than today's rates, it can save a borrower thousands of dollars over the old loan.

There are some common guidelines that must be met in order to qualify for this type of funding. These include meeting the age requirement of being 18 years or older, any bankruptcy in your history must have been discharged for a period of 2 years, and a repossession must be 12 months or older. The income requirements will vary from one company to another, but a general idea is that the total combined gross income must be anywhere from $1200 to $1800 per month. This amount is often a bit less for those in the military. Before a person can refinance a car loan, some other requirements must be met, including being current on any other credit or loan payments, having made at least three payments on the current auto loan, and the vehicle must be ten years old or less with fewer than 100,000 miles. Normally, no lease or line-of-credit conversions are allowed. Some auto lenders will not consider refinancing if the vehicle is used primarily for commercial purposes.

Keep in mind that the interest rate the borrower will receive is influenced by his credit rating. If his credit is in question, it is a good idea to speak with a loan officer who has experience in dealing with consumers who have credit problems. One way to solve the bad financial history problem is to find a co-signer with good credit history to refinance a car. Then the borrower's chance of obtaining refinancing with a lower interest rate increases. Getting the best deal in an honest way is part of godly stewardship. First Corinthians 4:2 says, "Moreover, it is required in stewards, that a man be found faithful." If we have been unfaithful with our finances, we need to confess that to God and let Him lead us into good stewardship. If we have been faithful with our stewardship, we may still want to investigate getting better terms for our loans through examining the terms and the rates to refinance a car.

Add to: File Insurance Business article Teen Photo Images