A bad credit rating can really mess up your life and turn into a snowballing nightmare. Imagine this scenario: when everybody else was getting awesome finance rates on new cars, you had to pay several percentage points more on your loan – a likely scenario if you financed through the dealership. Then you went shopping for auto insurance quotes but your crummy credit marked you as a poor risk, so you ended up with a high-priced policy. All this put a strain on your budget, so you missed a few car payments and your credit got worse. Before it goes that far, consider refinancing your high-priced ride. The sooner you can secure more manageable monthly payments, the faster you’ll improve your credit rating and qualify for the cheap car insurance quotes.
Auto refinancing is like home refinancing. You shop around for a lender who’ll offer you a lower APR and pay off your existing car loan. Instantly, your monthly payments drop, often significantly. For instance, if you were paying 19% or 20% on a $15,000 loan and you can refinance to a more reasonable 12%, you’re going to save some money every month and a lot of money over the life of your loan. Obviously, the earlier in the life of the loan you refinance your auto, the more money you’ll save. If you’re really smart, you’ll apply some of the monthly savings to pay more than your minimum car payment. Why? Because you’ll pay down your debt faster, which will in turn improve your credit rating faster, which can eventually help you get cheaper auto insurance.
You can easily shop for competitive auto refinance loans online. Before you do, however, you’ll first need to call your existing lender to find out what your payoff amount is. To ensure speedy loan approval, be sure to fill in the various online application forms accurately. Use the exact same name you used on your current auto loan. You’ll also need your 17-digit Vehicle Identification Number (VIN). You can find it on your vehicle registration or on a little metal plate somewhere on your car’s dash. You might also want to check an online resource to see if your car has retained its value. Auto refinance lenders typically won’t make a loan for less than $7,500 and they won’t lend more than the car is worth.