Although car refinancing is certainly more commonplace today than it used to be, it seems that a lot of consumers may still have some common misconceptions about it. So hang on as we quickly drive through five of the supposed obstacles in the road on the way to car loan refinancing!
Myth #1- It is time-consuming & costly to refinance my car
In the past, simply getting a quote for an auto loan was a time-consuming process, but now many lenders have made applying quick and easy. Today, there are many good reasons to refinance your auto loan. For example, RateWorks allows you to obtain a free auto refinance quote conveniently and securely online in as little as 5 minutes. Once you're ready to apply, we will steer you in the right direction by finding the best loan available. Then we’ll take the wheel from there and process the paperwork, pay off the previous lien holder, and complete the title transfer. So, we’re driven to save you both time or money!
Myth #2 - The fees may outweigh my car payment savings
This is another misconception that people sometimes have about refinancing car loans. Though you won’t know what your actual monthly or overall savings will be until you apply, one of RateWorks guarantees is no hidden fees. With a lower auto rate, an auto refinance gives you the option to speed up your payments or free up cash for other financial obligations. We will thoroughly evaluate your current auto loan including the rate and monthly car payment. Then we’ll let you know what your potential savings could be with a new loan.
Myth #3 - Dents or dings in your credit can affect your chances for auto loan approval
While credit score is a factor when applying for an auto loan, it's not the only thing a lender considers. Even if you have a few dents in your credit, you could still get approved. If your credit has changed since you took out the initial loan, you may want to look into refinancing. Some people are concerned that an inquiry into their credit will put a 'ding' on it, which is usually not the case. Many lenders merely do what is known as a soft 'hit' or 'pull' on your credit simply to see if you'd qualify for an auto refinance.
Myth #4 - It's too soon to refinance my car
It’s never too soon to save money or make payments more manageable. In fact, you can refinance at any time you'd like, even before making your first car payment. However, it is highly recommended to wait six months to a year for car refinancing, giving your credit score time to bounce back after taking out the initial loan. The main thing to keep in mind with car refinancing is that your new auto loan terms should not add to the total cost of your vehicle.
Myth #5 - Now is not a good time for an auto refinance
Last but not least, some people tend to hit the brakes too soon on an auto refinance simply because they believe that now is just not a good time to pursue it. Despite banks currently being a bit more cautious about approving loans, it certainly cannot hurt to try and apply. Interest rates in general are favorable at the moment, and auto refinance interest rates are actually hovering near historic lows. So, seeing as though rates are always subject to increase, it may be in your best interest to see what your options are right away - like today! Switching car loans can be a wise move that will lock in a low-interest rate before they start to rise, which could even be tomorrow.
Hopefully, this information has helped to muffle these myths and you are pulling away feeling more comfortable with car refinancing. Despite interest rates being low in recent years, you might still be paying too much for your monthly car payment, especially if your credit score was low or lower when taking out the initial auto loan. That’s why it’s important to check your options periodically. Get started now by heading directly over to apply with RateWorks, where we efficiently refinance car loans and let's see exactly how much money you can save!