Refinance Your Car and Lower Your Payment

Refinancing your current car loan is very similar to refinancing a home, however the process is much simpler, quicker, and in only a few minutes you can save yourself a lot of money.

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With companies offering such low interest rates, auto refinance loans have grown in popularity over the past few years.

Most people are unaware they're able to refinance their current car loan or they believe it's too much of a hassle. Truth is, it's not difficult and it's the best way to lower your car payment and save thousands of dollars after you've already purchased a car. If you really like the car you've bought but you're not crazy about the interest rate, you may want to look into an auto refinance loan.

Dealers are experts at making money when they arrange financing for you. The best way you can avoid their scams is to familiarize yourself with the way a car dealerships make money financing cars. If you've fallen victim to one of their tricks, you can fight back by refinancing your vehicle.

If you've had bad credit in the past or recently cleaned it up, refinancing you vehicle may be a wise option, even if you've been paying on your original loan for a year or two. A drop of just 2% interest points will save you hundreds of dollars over the life of the loan.

What is an Auto Refinance Loan?

An auto refinance loan is a loan that will pay off your current auto loan but normally has a lower interest rate and the process is simpler and much faster.

Benefits to refinancing your current auto loan online:

Why Should You Refinance Your Current Car Loan?

Many people don't realize the benefits of refinancing their vehicle when interest rates drop. Not only does refinancing your car loan lower your interest rate and your monthly payment. It will also save you hundreds if not thousands of dollars in interest charges.

Along with lowering your monthly payment, an auto refinance loan can also provide you with some extra money every month to spend as you choose. Refinancing car loans has become very popular over the past few years with the way interest rates have been dropping.

To determine if refinancing your current auto loan is right for you. You need to look at your own personal situation. Here are some situations when refinancing your car loan may be right for you.

Reasons to consider refinancing your vehicle:

Is it Easy to Refinance My Vehicle?

If you have good, average, or even bad credit the answer is YES! Online lenders offer several different auto refinance loan options for people with all kinds of credit. It only takes a few minutes to submit your information for free. If you do not get the answer you're looking for, you can just walk-away with no-obligation.

How to Apply for an Auto Refinance Loan Online

Many people are under the misconception that it's too difficult or a big hassle to try and refinance their current car loans. This is just one of the many untruths about refinancing your car I expose in another section. Fact is all you need is a computer and about 5 minutes of your time to possibly save thousands of dollars. You have a chance to save even more in interest charges if you have less than perfect credit.

Car Buying Tip - One of the biggest mistakes people make when applying online for an auto refinance loan is incorrectly inputting the wrong information. Always "double-check" everything you type to ensure you submit the correct information.

Car refinance has been gaining popularity over the past few years. We've received quite a few emails on exactly how to apply for an auto refinance loan online. So I've broken it down step-by-step for you below.

Step-by-Step Guide on How to Refinance Your Car Online

  1. Write down your current mileage and the 17 digit vehicle identification number (VIN) off of the vehicle you want to refinance. You will find the VIN in front of the driver where the windshield meets the dash, on the inside of the driver's door, or on your registration.
  2. Contact the lender of your current car loan and get your payoff amount, account number and lender's phone number.
  3. Go to myAutoLoan and LightStream. Check the current refinance interest rates they're offering. Our advice is, if it's 1%-2% lower than the APR you're paying now, you should at least apply for a free quote. Worst thing that can happen is you end up saving a bunch of money.
  4. Submit your information and the car's information to each site that can lower your interest rate. Make sure you enter your name as it's spelled on your current car loan. Double-check that you have entered the correct VIN, mileage and payoff amount.
  5. Your loan may be approved instantly or may take up to 24 hours. It may take slightly longer on Holidays.
  6. After receiving your approvals, pick the one that benefits you the most. If none of the approvals provide enough savings to you, no problem, there is no-charge or obligation on your part, so you can just walk-away.
  7. Each state imposes a title transfer fee that ranges from $5 to $65 depending on the state in which you live. Your state and not the auto refinance companies we recommend charge this fee.
  8. Once you accept your new refinance loan, you will either have a welcome packet sent to you with a check or you will be able to automatically download it right from your computer. All you have to do is sign the documents and return them with the provided express mail postage.
  9. Depending on who you decided to refinance with, all you have to do now is send the check you received from the refinance company to your current lien holder to pay off your current loan. Some of the companies we recommend will even take care of that for you also.
  10. Congratulations, you just made a very smart financial decision by taking the time to refinance your current auto loan!

How to Increase Your Refinance Loan Approval Chances

Each lender has its own set of algorithms and this is why it's important to comparison shop a couple different companies.

There are certain things you can do to increase your chances of being approved. The more tips you have completed before you apply, the better chance you will have for being approved for an auto refinance loan.

Tips on how to increase your approval chances for an auto refinance loan:

Minimum Auto Refinance Loan Requirements

How Much Can You Save Refinancing Your Car?

This is the most commonly asked question when it comes to an auto refinance loan. There are many factors that will come when figuring how much you will save when refinancing your current car loan.

Auto refinance loan example #1

Let's say you bought a new car and financed an amount of $22,000 for 60 months through the dealership's finance department. At the time you purchased the car you didn't have any credit, you had bad credit or the dealer tricked you with a car buying scam like the credit score finance scam .

Now you have a great car but a horrible car loan. Don't feel bad, this kind of situation happens all the time at car dealerships across the nation. Car dealers are professional actors when it comes to selling cars. You get wrapped up in emotions and end up paying 18-21% interest or higher when buying the car.

After paying on your car for a couple months, you decide to refinance your car loan with an online lender. You end up getting approved at 8%.

Interest Rate Calculations on a Car Loan

Car Loan Payment APR (Interest Rate) Total Interest
$606.99 21.95% $14,419.45
$570.09 18.95% $12,205.22
$500.00 12.95% $8,000.28
$446.08 8.0% $4,764.84
$435.11 6.0% $4,106.11
$405.16 4.0% $2,309.81

If your current rate from the dealership was 18.95% and you're approved through an online company to refinance your car loan at an APR of 8%. You'll end up saving $7,440.38! You'll also lower your monthly car loan payment from $570.09 to $446.08. Giving yourself an extra $124.01 to do with what you wish.

As you can see from the example above. Taking a few minutes to apply for an auto refinance loan through an online companies such as LightStream and myAutoLoan doesn't cost you a penny and may save you a few thousand dollars in interest charges.

Frequently Asked Auto Refinance Questions

The following questions are the most common we receive about refinancing an auto loan.

Should I Refinance if I Already Have a Low Interest Rate?

The short answer is YES! Refinancing a car loan is not just for people who have bad credit trying to get a better interest rate. Having great credit, you already understand and know how to manage your money wisely. If you're paying around 4% APR or more on your current car loan, you may still have some savings coming your way.

It's absolutely free to apply and the most reputable companies such as RoadLoans.com, myAutoLoan.com, and Up2Drive do not have any fees if you decide to go with them. If after you've applied and you don't see any savings, you're under no obligation to do anything further, just walk away.

If you are currently financing $25,000.00 and paying 6.95% on your current car loan and you get approved online for an auto refinance loan at a 4.95% APR. You will save yourself $1,393.93! You should always take advantage of low interest auto refinance loans, the only thing that can happen is they save you some money.

Auto Finance Tip - Always include an additional $10, $20, $50 or $100 to your monthly car loan payment. Note the additional payment is to be used towards the principle amount of your car loan.

The additional money will add up over time reducing interest charges, build equity faster and pay off your vehicle that much quicker. Most reputable lenders do not have early payoff penalties. Make sure you read your contract to confirm this information.

Does it cost to refinance my current car loan?

Reputable auto finance lenders will want to acquire your business for free. They will make money from the auto loan interest rate when they refinance your car loan. If an automobile finance lender is requiring an upfront fee of any kind just for you to apply with them, AVOID THEM!

Most reputable online lending companies such as LightStream and myAutoLoan do not charge a fee to apply for an auto refinance loan. You may be subject to some fees that are associated with the actual refinancing of your current car loan but they are usually minor compared to the amount of money you can actually save.

Does refinancing my car require a large down payment?

Putting money down when refinancing your current car loan is not a common practice. Every person's situation is different; some lenders may require a down payment. Once you're approved, the lender will provide you with any additional information before you sign any documents.

Applying for an auto refinance loan online is free and there is no obligation. If you are required to put money down and you don't have any funds available. You can always just "walk-away".

What is the minimum amount you can refinance?

Most auto lenders will not approve an auto refinance loan if the payoff is less than $7,500. Lenders must make it worth their time and expenses to carry the loan. If you're payoff is less than $7,500. You may want to apply for a little more to use towards other financial obligations.

May I have a co-signer when refinancing my car?

You can have a co-signer sign with you through most lenders. If you have bad credit or if you don't earn the minimum monthly income. Using a co-signer with good credit will greatly decrease your overall risk and increase your chances of being approved at a lower APR.

How much should I borrow with a refinance loan?

To create a little flexibility, it's suggested that you apply for a larger amount than actually needed to finance the remaining balance of your current car loan.

You can use the extra money to apply towards high interest credit cards or even purchase an extended auto warranty. If you're extending your car loan's term when refinancing, you may want to make sure your vehicle will be protected until it's paid off.

There are several auto refinance loan myths floating around the Internet keeping car buyers, like yourself, from saving thousands of dollars. Find out the truth about these misconceptions in our most common myths about refinancing your car.

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My Recommended Auto Refinance Sites

LightStream and MyAutoLoan are the quickest way to refinance a car online. These sites some of lowest interest rates available in the industry. Requesting a quote is free and there are no fees or obligation to buy anything. This makes it "risk free" to see if you'll benefit by refinancing your current car.

Share Your Tips - If you have any tips on refinancing a vehicle online that will help other car buyers save money. Please tell us about it in the comments below, so we can share it with everyone.

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Did you know?


Refinancing your vehicle is the quickest way to get out of a high interest car loan. It will save you money and also lower your current payment.

Lowering your interest rate by just 2% can save you thousands of dollars over the life of your loan.

You can apply for an auto refinance loan at anytime to see if you qualify for a better interest rate than what a car dealership signed you up for.

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