Posted on November 20, 2019 by NALN
Auto loan refinance is one of the easiest ways to minimize your monthly payments and reduce the amount of money you pay in terms of interest. When it comes to auto loan refinancing, there is a variety of myths that float around. Whatever you do, don’t allow the following auto loan refinancing myths to get in your way.
Let’s break it down.
Depending upon what your current situation is, refinancing may allow you to save a lot of money. Consider yourself lucky if the interest rates have gone down since you took the loan, or your credit score has improved. One thing you should keep in mind is that a low monthly payment does not equate to higher savings. In case you extend the term of your loan, you may be paying lesser each month, but you will end up paying a lot more in the long run, depending upon the interest.
Even if you are underwater on your auto loan, it can still be refinanced. The moment you drive a car out of the showroom, its value decreases by at least 10%. The cost goes even down when they car experiences accidents and high mileage. A loan is considered underwater if the value of the car is less than that of the outstanding loan. If you refinance at a lower rate of interest, you can save money and reduce your monthly payments, unless you don’t extend the term of the loan. If the term of your loan extends, you might end up paying higher interest. As a result, you will become more underwater on your loan.
When evaluating your refinance application, your credit score is one of the major factors; your lender takes into account. However, a higher credit score isn’t the only thing they look for. Most lenders consider multiple factors to determine whether or not you are eligible for refinancing. As long as you meet other requirements, you qualify for refinancing. If the interest rates have dropped generally, you can still refinance your auto loan, even if your credit score isn’t up to the mark.
A good credit score is helpful but is not the only factor that guarantees approval. Despite your credit score, lenders take a host of other factors into consideration. For example, some lenders won't approve your application if your car is more than seven years old. Before you apply for refinancing, make sure to go through their terms and conditions.
Auto loan refinancing can be beneficial if it enables you to get a lower interest rate. Having a good credit score is essential, but it’s not the only factor lenders consider. Even if your credit score hasn't improved since you took the loan, you can still find reasonable interest rates.
National Auto Loan Network is headquartered in Newport Beach, California. The company was founded in 2010, by a group of finance professionals with over 40 years of combined industry experience. Under the direction of president and CEO, Marco J. Rasic, NALN specializes solely on the refinancing of motor vehicle loans. National Auto Loan Network''s skilled team of loan officers help hundreds of consumers replace their high-interest auto loans more favorable ones. For more information about National Auto Loan Network please visit naln.com
