- 1). The first thing to know is if lenders will consider you eligible for an auto loan refinance. Typically lenders will not refinance a car loan if the car is more than seven years old or has more than 80,000 miles on the odometer. Most lenders will not refinance loans with balances of less than $10,000. Lenders will also not refinance any of their own auto loans.
- 2). Shop around on the Internet to find cheap car refinancing rates. The internet is bursting with auto refinancing web sites. There are also many web sites that act as a broker, and will gather four or five competitive bids from different lenders who want to offer you a refinancing loan package.
- 3). Contact the three credit reporting agencies, and ask for your annual free credit reports and credit scores. Knowing your credit score will save you time if you share it with lenders, instead of waiting for them to pull your credit report. This will also help to keep your FICO score from being lowered if you have too many inquiries from different lenders on your credit reports.
Your credit score will determine the interest rates that you will qualify for with most lenders. The higher your credit score, the lower the interest rates lenders will offer to you. If your credit score is below 600, you should think about postponing a refinance of your auto loan until you are able to bring your score up to at least 600 or higher. - 4). Last but not least, once you have an idea of your credit score, and if you know your vehicle loan is eligible for a refinance, then start by asking a variety of lenders for no-obligation quotes. Read through the small print, and learn about the terms of the loan. Look for things like penalties for early payment of the loan in full, any hidden or unexpected fees, or any other costs. The idea is to save you money, and knowing these few things will dramatically lower your risk of getting into a bad car refinancing loan.
While you're here, be sure to take a look around for more tips and information on car refinancing.
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