Is Refinancing a Car Expensive?
Many misconceptions are floating around the internet about auto refinance myths. Believing these misconceptions keep people from taking advantage of a service provided that may save them hundreds, if not thousands of dollars on their current high-interest car loans.
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I want to clear the air about ten of the most common auto refinancing myths. Take the time to read through them and then decide if refinancing your car is the right choice. Refinancing a car loan can have great benefits to you financially. Do your own research before taking someone else’s word if you should refinance your vehicle. The truth is refinancing your car can get you out of paying a higher interest rate and lower your car payment.
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NOT APPLICABLE – Unlike your home, where the loan is based on your equity. When you apply for an auto refinance loan, you do not have to have your vehicle appraised.
You also don’t have to worry about paying for an on-site appraiser or dealing with a car dealership to get your vehicle appraised. Auto refinances lenders will use NADA, KBB, or other books to value your current car based on the year, make, trim, features, mileage, and vehicle identification number.
FALSE – Most lenders advertise an average savings of anywhere between 2-5% when you refinance your vehicle. Lowering your rate by 2% on a $25,000 loan, from 6.95% to 4.95% will save you $1,393.93 over the life of a 60-month loan. Some of our readers have told us they’ve received discounts of up to 7% or more when refinancing.
Not only will you save on the total interest charges but you will also save on your overall monthly payment. The average customer may save anywhere from $20 to $150 a month depending on the term of your refinanced loan.
FALSE – Bad things happen to good people. Lenders will consider individuals that have had bad credit in the past and have recently proven to make their payments on time.
Your approval chances will dramatically increase by having stable residence history, job history, verifiable income and are currently in good standings with other credit accounts and financial obligations.
