Refinancing your Auto Loan is typically easier than buying a new/used vehicle. There are several reasons for refinancing your car loan, however, the primary reason is to lower your monthly payments. This can be done by either securing a lower interest rate, adjusting the term of the loan, and ideally both. Another reason for refinancing may be to remove or add a co-signer to the loan.
Many people fear the extension of a loan, but in fact it is a blessing to be able to do so. With the lowest payment possible, you ensure that the least amount of interest per payment goes to the bank. With a simple interest loan, anything you pay over the minimum goes directly to the principal so you can pay down the actual balance of the loan specifically. So, you actually pay the loan off in a shorter amount of time. Example:
If your current loan is $400/mo and you have 36 months remaining and you refinance at 60 months but it gets your payments down to $200/mo – you can make that exact same $400 payment that you would be making in your old loan – BUT you would be making double payments, essentially paying the new loan off in 30 months saving you $2,400 in payments! AND you always have the security and comfort of the lower payment if you ever have a tight month or need the money elsewhere.
After we determine the payoff for your current loan, next we check equity or what’s called LTV (loan to value). Basically, the value of the vehicle must be in a range of the total amount to finance. Also, credit, residency and employment must be reviewed and added to the application. Once an approval is final and documents are signed your old loan is paid off. Boosting your credit score and you resume paying the new loan with a better interest rate, lower payments and giving you the ability to pay the loan off as quickly as you like!
Be sure to understand all the options available to you when refinancing your car loan. For help navigating your auto refinance and getting the best rates possible, call iLendingDIRECT at (866) 683-5505 or Apply Now.