Refinancing Auto Loan

Financing a car loan can be done directly. In this case, you obtain the auto-financing loan straight from the bank or other lending agency. Indirect financing for auto loan involves financing from a dealership. This will include a mark-up on the interest rate. Refinancing an auto loan involves trading a less-favorable car loan for better terms. Bad credit car loans are available for consumers whose credit worthiness has taken a beating, due to late payments and defaults.

Auto loan

Auto loans are generally spread over 36, 48, 60 or 72 months. Car loans that are spread over shorter durations are cheaper but involve large monthly payments. When applying for an auto loan, these are some of the documents that need to be verified:

• Proof of income
  
  
• Proof of residence
  
  
• Good credit history
  
  
• Valid drivers license
  
  
• FICO credit score
  

Bad credit auto loan

Having bad credit is not reason enough to keep you from buying the car you want. Many auto loans are geared towards persons with bad credit. In fact, it is easier to get a bad credit car loan these days than even a few years ago. Some finance institutions even have special departments catering to lending bad credit car loans or sub prime lending. First step in acquiring a bad credit auto loan is to verify your credit report for accuracy. Credit unions lend auto loans at low interest rates to members with good credit.

A tiered approach to auto loan pricing is considered by many a credit union. This allows them to offer car loans to members with different degrees of credit worthiness. This kind of risk-based pricing is followed by banks and financial institutions too.

Deteriorated credit worthiness can prevent a borrower from qualifying for an auto loan at the best rates of interest. This is on account of increased chances of future default by the lender. The higher interest rates on bad credit car loans is to compensate for this perceived risk.

Refinance auto loan

Refinance car loan works in much the same way as refinancing home loans. Refinance auto loan refers to trading a less favorable car loan for a newer car loan at better terms. Refinancing a car loan is a prudent decision if you are able to reduce the interest rate substantially but not stretch the term of the loan beyond the current repayment schedule.

If your refinance auto loan lender stretches the term of the loan, then it will not provide much benefit to you. The underlying idea of refinancing car loans is to reduce interest costs. The benefit of refinance auto loan is the reduced monthly payments towards the car loan. Many car loan holders are taking advantage of dropping interest rates to save money through refinancing car loans.

This can lead to substantial advantage if you have paid a high rate of interest on the existing auto loan and still have a long payment term. The Internet is a popular sourcing ground for refinance car loans. Net savvy consumers hunt around for online car loan deals that save at least two percentage points on interest rates.

Online auto loan

Today there is no dearth of online auto loan lenders. But you need to exercise caution and check for online car loan lenders who offer the best prices. You need to check up on application fees, paperwork fees, administrative fees and other incidental expenses that are part of the auto loan contract. Online auto loans can be approved and sanctioned within minutes. All you need to do is to fill in the application forms online. But it is essential to shop around for a reliable financier for car loans.

Firstly, a used car buyer must research his driving habits, requirements and budget before looking for a financing scheme. Resorting to a used car loan increases the total cost of the car. You will be paying for the cost of credit as well as interest and other loan disbursement costs. Look for a used auto loan that does not require you to put down a large payment.

New car loan

A new car loan is one that will help you finance your dream wheels. But keep a few things in mind before finalizing on a new car loan deal. You need to compare the annual percentage rate (APR) and the duration of the loan. Negotiate for the best possible price on your new car loan. Beware of online auto loans that come with high prepayment penalties. It is essential to preserve the flexibility so as to dispose off the auto loan at an accelerated rate, if the need arises.

Auto loan calculator

When you are looking to finance your car, you need to weigh different car loan options to decide on their comparative merits and disadvantages. Using online auto loan calculators is the easiest and quickest way to compare various car loan options. An auto loan calculator is a tool that comes in handy to decide on an auto loan that is most beneficial to you. Car loan calculators help you estimate the true cost of your loan.

You can try various permutations of interest rates and term periods. What-if scenarios can be easily plotted using online car loan calculators. You need to enter the car loan amount, interest rate and duration of the loan and the auto loan calculator will provide the monthly payment figures. You can make use of this tool to find out the benefits of paying any additional amounts in between. Use online auto loan calculators to find answers to questions such as these:

• How much car loan amount can I borrow?
  
  
• What will be the monthly payments on my used car loan?
  
  
• How much can I claim as deductions from my taxes?

Car title loan

A car title loan allows you to borrow money with your car as collateral. Generally, a car title loan is a 30-day loan. The first step in availing a car title loan is to appraise it and find its value. Depending on the appraised value of the vehicle, you can borrow in the range of about $500 to $10000. The vehicle must be a paid off vehicle with clear title. You can either choose to pay the loan in full or pay the interest and extend the loan.

The financial institution that is lending the car title loan will allow you to use the vehicle. But in some instances, the car title loan lender keeps a set of your car keys. You might have to face repossession of your car, should you default on the payments on the loan.