Refinancing an automobile is not the same type of transaction as refinancing a home mortgage. Generally, when refinancing a mortgage loan, the process involves the consolidation of credit card balances, into the new loan: and unlike that type of arrangement, refinancing an automobile is generally an effortless process. Another bonus, provided to the consumer is there are minimal fees to zero fees, attached, to refinancing an automobile loan. Refinancing an existing auto loan is, therefore, a very unique and positive financing option. The reason more persons do not refinance their respective loans is that information, within the lending marketplace, is not substantial enough, for the borrower to easily choose this favorable financial loan option. The article, which follows, provides the borrower, much, in the way of knowledge, in understanding refinancing his or her automobile.
There are four conditions, when refinancing an existing automobile loan, which provide the borrower with a sensible financial solution. The four conditions are listed below:
1—The first condition is that interest rates have declined, within the lending marketplace. When interest rates drop—even more than a few points, since the consumer has made purchase of his or her automobile—the savings, with respect to the loan arrangement—can be quite substantial. It is important for the consumer to recognize the fact, that even a mere percentage point or two, can make a vast amount of difference, with respect to the monies paid over time, as it pertains to his or her existing automobile loan. It is very important, the borrower check out refinancing his or her existing car loan, when interest rates drop.
2—Another condition, wherein, a savvy consumer is smart, in refinancing an existing auto loan is when his or her credit score has improved. When a consumer has had, in the past, a few negative items on his or her credit report; or had no credit history, when it is the car was purchased—over time, this type of situation works itself out. In example, as it pertains to the situation where negative items are found on the credit report: the consumer, during the interim period, may have invested in some secured credit cards, making his or her payments—on time—and, thus, proving his or her credit worthiness. Or, as it pertains to the preceding situation, he or she may have had a company clean up negative items—that did not belong to him or her. On top of the other positive actions, the consumer, who is consistent in making his or her auto loan payments, on time, proves his or her credit-worthiness, too. The individual, who has had no credit history, whatsoever, when purchasing his or her automobile, by making his or her payments on time, has, in effect, demonstrated that he or she may be depended upon to proceed in making payments, in a timely manner. Once, the credit score of the individual has improved, on a general basis, such an individual is in a favorable position of possibly being able to take advantage of lower interest rates. As it pertains to the two unfavorable circumstances—that being, negative items found on the credit report, and a history of no credit, such profiles can result in interest rates, as high as eighteen percent, or even more. It pays, then, for the borrower to pay his or her loan back, in a timely manner—since thin credit histories, result in higher rates of interest. This is to say, several months, wherein, the consumer demonstrates that he or she is able to make his or her payments on time, may interest a lender in refinancing that individual’s existing loan to a lower rate of interest. The consumer is wise, then, to check his or her respective credit history, prior to taking action, with regard to refinancing an automobile.
3—Another condition, which requires an individual to consider refinancing his or her automobile loan is, wherein, he or she simply did not receive the best rate possible, when purchasing his or her automobile. Additionally, just because a consumer may have had, even, a high credit score, wherein, his or her history was unblemished—does not necessarily mean, such a person, received the best rate available. The vehicle loans, too, made by many car dealers, normally, due to their nature, carry high rates. Those rates are much higher than what the average consumer deserves. Many consumers, go along too, with the higher interest rate, simply because he or she has not acquired the knowledge or experience in realizing that many of the dealer-financed arrangements, provide the consumer with rates that are a tad bit too high. The consumer must understand that the higher rate is generally a revenue stream for the dealer. Other items, too, such as rust-proofing the automobile and warranties, which are extended, represent other profit centers for the car dealer. A person, finding out such information, after-the-fact, may wish to select refinancing his or her car loan, in order to receive a lower interest rate and/or a lower payment.
4—A condition, wherein, refinancing is a sensible choice is when the individual’s financial situation is not as healthy as it was at a prior time. This form of financial deterioration, provides the consumer with the opportunity to address it, in a practical manner. Some consumers, experience setbacks—financially—and require a ready solution. It may be, with regard to the preceding situation, that refinancing an auto loan, in order to reduce payments, provides a good solution. The loan term, with regard to the re-fi option, is increased, and, as a result, the monthly payment is decreased.
Locating the lender that refinances is the most effortless step—in way of refinancing the loan. The lender, Ignition Financial, can easily educate the consumer and make refinancing his or her existing car loan a reality. In turn, his or her payments—on a monthly basis—can be reduced, freeing up cash, so he or she may experience a more vigorous and active lifestyle. When the borrower is thinking: “ I wish I could slash my payments,” the knowledgeable associates, at the preceding financial organization, can make payment reduction a reality.