In these hard economic times, it is common to see people getting fired from their jobs. If you have availed a car loan but finding it difficult to pay your installments on time because of unemployment or any other reason, you have the option of auto loan refinance that makes it easier for you to repay your loan. Refinancing your car is a procedure that reduces your monthly installments to give you a breather. It can also be used to restructure the term of the loan so that you pay less every month but for a longer term. Should I refinance my car is a question asked by millions of people on the internet.
What you can do if auto loan interest rates suddenly drop
If you applied for an auto loan at a time when interest rates were high, but they have dropped significantly since then, it is better to shift your loan to another bank that is offering auto loans at lower interest rates. Auto refinancing is much easier than you think. Banks are eager to refinance these loans and they are competing against one another to get the biggest share in the auto loan market.
Things to keep in mind before applying for auto refinance
If you are facing difficulties in paying high installments of your auto loan, it is prudent to refinance car loan. However, not every auto loan can be refinanced as you learn when you apply for this facility.
- In most of the states, your auto loan must be higher than $5000 at present to be eligible for applying. In some states, this limit is higher and stands at $7500.
- Your car should not be older than 10 years
- It should not have covered more than 125000 miles
- Banks go for a credit check when you apply for auto loan refinance. Apply only if you think your chances of getting an approval are high.
Do not apply if your current auto loan is in bad shape
If you have defaulted on a few of your installments in your present auto loan, it is better not to apply for auto loan refinancing. This is banks examine your past repayment history and are likely to reject when they find that you are a defaulter. Try to repay some money to bring your auto loan on track so that your application for refinancing a car becomes easy.
You have to give your personal information along with your present auto loan, along with your application of auto loan refinance. Compare the features of different banks before applying so as to get the best auto refinance rates. You can ask for quotes online from different banks to compare the rates offered by them.