Most people in Phoenix who are paying a high interest rate on the car loan are advised to refinance their loans and save money.
To ensure that you do it right, you can start with reviewing your car loan policy. Another factor that needs to be considered is the terms and conditions of the loan that you need refinanced. It is essential to know that on the current policy. Check the interest rate, how much money is left to repay and the paid off amount. See if you signed a pre-payment plan.
The next step would be to see whether your vehicle qualifies for the refinance. As most banks and lending institutions have their own prerequisite requirements, your car or vehicle will not qualify if the remaining loan is lower than $7,500 or you took the loan more than 7 years ago. While some Phoenix banks and lenders refuse to refinance when the car has completed more than 70,000 miles or is being used as a commercial vehicle. Thus, you need to ensure that you are eligible for the refinance.
To start with, it is best to compare interest rates and then decide what works for your budget. Call up a few banks and lenders and get the free quotes while don’t forget to check the current average rates. Remember that even if you have anew car loan, you need to be checking out the used car prices and interest rates because when you refinance that is the rates that you’ll be paying.
To check the actual interest rate that you’ll end up paying if you refinance, use an online calculator to do your math on the auto loan. This will help you get an idea about the total saving when you refinance. After you are completely satisfied that refinancing is the best option, talk to the lenders or banks where your car loan will be accepted and know more about the processing fee and other related details. You should expect to pay a fee for transfer of titles and the re-registration of the car. While some lenders or banks add on a processing fee and discuss whether there is a pre-payment fee in case you want to pay early. This is a negative factor because you will need to repay on a longer term even if you have the option of paying early.
After finalizing the lender or bank for refinancing, you will need to submit the copy of your current loan and provide the financial institution about the mileage and VIN number of the specific vehicle. However, it is best to avoid refinance options that offer cash out offers as they tend to increase the cost and tenure of the loan.
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