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Who Qualifies for Auto Refinancing?

Who qualifies for auto refinancing?In today’s economic climate, experts are constantly pushing for people to save money. Recent estimates are that to be financially viable a person should have at least three months’ worth of bills saved up. This can be problematic for those living paycheck-to-paycheck. In order to get more financially stable, many are turning towards refinancing their home and auto loans to try and save money. The question is who qualifies for auto refinancing?

Simple and Clear

The process of refinancing a car is much easier than that of refinancing a mortgage. The qualification criteria are more straightforward and there is less paperwork, time and cost throughout the process. The catch is that credit becomes an important factor.

Interest Rates

Pay attention to current interest rates. If the rate you are currently paying is much higher than the current standard rate, you may want to look at refinancing. For example, between 2008 and 2013 interest rates dropped by nearly 2.5%, a significant decrease. If you are paying 7% or higher on your current auto loan, now might be a good time to consider trying to lower those monthly payments.

Credit Score

Credit is all-important when it comes to auto loans. Still, the criteria for applying are far less than those for home loans. If your financial situation has improved over the past few years, and you are maintaining a strong payment history, you might be surprised at just how qualified you are for a new and lower interest rate on your loan.

How Long Is Your Loan?

The length of your loan is another factor you should take into account. If your loan is very long—up to eight years—it may be time to look into re-investing. A shorter loan at a lower rate may involve equivalent or slightly higher payments, but you will pay off your vehicle faster. If you can afford to do so, you might be able to save more money faster after all is said and done.

With a long loan you will pay much more in interest because of the long term. They key factor here is that it is not always about your monthly payment. Sometimes, removing the debt faster is a more ideal situation.

Things to Avoid

As attractive as refinancing may be, there are certain situations in which you should avoid doing so. If the existing finance deal includes a penalty for early payment, or there are fees that offset any savings you would gain, refinancing may be a bad idea.

Likewise, understand that refinancing can extend the life of your loan. If you are trying to reduce your repayment term, a refinance can sometimes be a bad deal. You are essentially taking out a new loan to pay off the old. Make sure that your new loan term will reduce the money you spend overall, not increase it.

If you think that refinancing your auto loan would be a good step for you, we are happy to discuss the possibility. Give us a call today 800-258-3759; we are here to help!

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What Kind of Rates Should a Car Refinance Loan Offer?

What Kind of Rates Should a Car Refinance Loan Offer?A car refinance loan rate will vary wildly depending on your credit history, your current loan status and even the time you happen to ask the lender. That being said, there are several different categories of loans given your current financial situation.


An ideal situation for refinancing would be that your credit was good when you got the initial loan and it has improved since then. In these conditions, you may want to reduce the loan duration to pay it off earlier and with less interest. This will net you a lower financing rate.

The low end of these loans would be a 36 month loan with a credit union or similar community-based institution. Your payments could be in the high end of $600-$650 for a $20,000 loan, but your interest rates would be as low as 2.5-4 percent, and sometimes lower.

This interest rate increases when you wish to extend your loan terms to 48 or 60 months. For most institutions, you would receive a rate of 6-11 percent for a longer repayment plan such as this. You would also run the risk of your vehicle reducing its value during this time.

Recovering Credit

If you bought your vehicle with a credit score of 580 or lower, you will most likely be in a loan with an interest rate as high as 11-18 percent. Refinancing after making reliable payments will get you a better interest rate because your credit may have increased.

Assuming your credit score increased to 620 or higher, a 36 month loan in this situation can qualify for a rate of 7-11 percent. Longer loans will keep a higher rate of 10-14 percent, but this may still be better than the rate you received upon your initial vehicle purchase.

Bad to Worse Credit

If you are refinancing to avoid defaulting on your loan, your interest rate may be comparable to your initial loan but with lower monthly payments. You are most likely looking for a 48 month or 60 month loan in this situation, which can get you an interest rate of 11-18 percent or higher.

You can lower your interest rate with some lenders by putting money on deposit or getting a cosigner. In most situations, you may be stuck with a high rate because your credit score is still suffering and you are trying to extend the loan’s terms. Your best bet would be to refinance now and take steps to improve your credit. Some of these steps include:

  • Pay the full balance for unused lines of credit and close them out
  • Make vehicle payments on time
  • Avoid opening new lines of credit for the next year or so, including cash advances
  • Keep credit card balances low

With these strategies, your credit score can improve drastically within 30-40 months. Once this happens, try to get a new car refinance loan again. You will hopefully be in the middle category of “significantly improved” and have a lower interest rate.

You would also do well to save up and prepare for a shorter loan term when you get a car refinance loan. This should get you much lower interest and help you with a faster overall repayment.

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Can You Refinance Your Auto Loan with Bad Credit?

Refinance your auto with bad CreditMany consumers with bad credit end up wanting to refinance their auto loans down the road. Most people are not sure what resources are available for them.

Fortunately, many auto loan companies are more than willing to take on customers with bad credit. What you will want to keep in mind is that certain factors will improve your ability to get a loan refinance, as well as improving the terms you will receive.

Reduce Your Monthly Payments

The main reason most people want to refinance is to lower their monthly payment. A low payment can help you stay afloat and avoid defaulting. A lower payment generally means more compounded interest and an overall larger amount spent on the loan.

Make Payments on Time

Make an effort to pay off your monthly statement for your existing auto loan. Making payments on time helps increase your credit score and demonstrates financial responsibility to a lender. They can review your record and see that despite your credit score, you have begun to take part in financially responsible behavior.

If you default on payments, you may have difficulty refinancing. The lender will see this action as a risk, made worse by your unfavorable credit score. If you do manage to secure a refinance loan after defaulting on your old one, you may face harsh penalties and fees.

Interest Rate Adjustments

Your interest rate may change depending on the lender you choose, your current financial situation and the economic climate. If you have been paying your existing loan on time and have demonstrated responsibility, you may see a small reduction on your interest rate. National interest rates may also have lowered, allowing for a more favorable interest rate upon refinancing.

On the other hand, if your credit has gotten worse since your last loan and you have had trouble making payments, your interest rate could see a slight gain. You also may see a higher interest rate in exchange for an abnormally small monthly payment.

Your Car’s Condition

Another factor in refinancing is the overall state of your car. While refinancing lenders will not appraise your vehicle, they want to make sure your new loan is not covering a bad asset. In other words, your vehicle has to have a certain amount of value for them to be interested in giving you a loan.

Here are some common conditional factors; these will vary depending on the lender.

  • The vehicle was manufactured within the last 5-10 years
  • The vehicle has less than 50,000 miles on the odometer
  • The initial value is not significantly lower than the balance on your current auto loan

Other conditions may require someone with a set income level, usually higher than $2,000 a month.

A Helping Hand

No matter what your situation, you can eventually find someone who will be willing to help you refinance. Getting more favorable terms on your auto loan will free up your credit and set you on a path towards building even better credit into the future.

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Top 5 Ways Refinancing Your Car Loan is Beneficial

blog-refipayment-Top-Five-Ways-Refinancing-Your-Car-Loan-is-BeneficialRefinancing your car loan may seem like a lot of work.  But, if you have an auto loan, and have not considered refinancing, here are some of the best reasons to do this. This process allows you to change the terms of your existing loan into a completely new loan agreement.

1. Pay Your Loan Off Faster

While most car loans allow you to pay more than the monthly payment at any given time, being on a set schedule helps. Instead of having to chip in some random extra amount, you can have a loan payment schedule that takes care of the whole balance in far less time. Doing this saves you a bundle on interest as well as adding peace-of-mind.

Paying off your loan earlier will also help free up your credit and improve your overall score.

2. Get a Lower Interest Rate

Your interest rates are set by a combination of market factors and your own personal credit score. If either of these situations improves, you could qualify for a lower interest rate.

Car refinance loans are designed to get you the best terms possible. You could easily benefit from having your finances re-evaluated and end up paying far less overall.

3. Lower Your Monthly Payments

Since we cannot predict the future, we sometimes end up biting off more than we can chew. With car loans, we may agree to a monthly payment amount that is simply impossible to keep up with. Maybe your job situation changed or maybe you were unable to predict how your finances would turn out several years down the road.

Either way, if you are clipping coupons and skipping meals to pay off a car every month, then you should probably consider refinancing.

4. Get Out of a Bad Loan

How easy a loan is to pay off can often be at the mercy of the lender. Some lenders may have unreasonable demands or unscrupulous tactics that were not obvious at the time of signing. A lender may make stringent requirements such as making a loan payment in person every single week, or they may give you the runaround regarding a payment you know for sure was sent in the mail.

No matter the reason, if you suspect that your lender is going to make it difficult to hold up your end of the loan agreement, you may want to refinance.

5. Keep Your Car

While refinancing does not get rid of your auto loan debt, it can help save you from becoming delinquent on your current loan.

In a worst case-scenario, you may be in danger of defaulting on your loan and losing your car. Refinancing will help settle any existing loans and get you into a new one. The new terms can be easier for you to handle, and they could also save you from having a nasty credit blemish and no car to show for it.

Refinancing your auto loan could be one of the best decisions you have ever made. Strongly consider this option if you think any of the above reasons might apply to you.

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Auto Loan Refinancing 101

Auto Loan Refinancing 101

Auto loan refinancing is a tool. Like any tool, it can be used to help or hurt a situation depending on how it is wielded. There are many great reasons to refinance, and several bad ones. Knowing when, how and why to get an auto loan refinance can make the difference between making your debt easier to pay off or significantly harder.

What is Refinancing?

Refinancing is simply transferring the terms of your loan to a different plan, often with a completely different creditor. In essence, when a creditor agrees to refinance your loan they are completely paying off your existing agreement and opening up a new one. When this happens, you owe the refinanced amount to the new creditor instead of the original lender.

Why Would Someone Refinance?

Since refinancing allows a change in the loan terms, it can be one of the few opportunities a person has to adjust how their debt is being paid. These adjustments include:

By refinancing, a person can secure more favorable terms for paying off their loan. A refinancing agreement will never be able to reduce the principal amount owed on a loan, but it can help reduce the overall balance by lowering the interest or paying the loan off quicker before more interest can add up.

One of the biggest reasons people refinance is because they can obtain a lower interest rate. This reduction can be the result of national averages shifting, or because the person has an increase in their credit score of 50 points or more.

Another reason people might want to refinance is because they want to lower their monthly payments. While some refinancing plans may allow this because the interest rates are less, others may simply extend the duration of the loan past the original agreement. The vehicle owner end up taking longer to pay the loan as a result, or possibly paying more interest.

If extending your loan is the only possible way to keep your car, refinancing may be your best option. It is important to keep in mind that you could be digging a deeper hole of debt for yourself, so be careful.

What’s the Best Way to Refinance?

Since the whole point of refinancing is to secure better terms, shopping around for the best rate is extremely important. Hopefully your financial situation has improved since you first bought the car, and you will now be able to inquire about options that weren’t available to you at signing.

If not, you will need to find a lenient lender who can help you avoid the strict repercussions of defaulting on your previous loan.

In both instances you should be patient and perform extensive research on available refinancing options. You will not feel as pressured for time as you may be when buying a car, allowing you time to find the best lender for your needs.

The bottom line is to run the numbers of any offers you receive, make sure that they give you an advantage rather than making your car repayment more difficult and take your time so that you can come out ahead of the game.

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Are There Other Upside Down Car Loan Options Besides Refinancing?

Upside Down Car LoanWhen you have bad credit and you try to trade in your car on a new one, you may find that your current car financing situation has left you in an upside down car loan. This means that you still owe more on your car than the vehicle is currently worth. This can be a nightmare for the prospective buyer; many people refinance their debt to keep payments manageable, but that doesn’t solve the problem of needing a new car, and the shorter term of a new refinance can result in much higher monthly payments that can lead you into more trouble.

The question is, are there other options available besides refinancing? There are several, in fact, and each carries its own risks and benefits.


Seek Incentives to Cover the Loan

Sometimes, you can find a good deal on new car financing which will carry enough incentives to cover the amount you still owe on your old car. This is an ideal trick. The incentives cover everything you owe, leaving you clear to begin payments on the new car. The problem with this is that your new car may lose value faster than one that isn’t “incentivized,” which could see you end up in another upside down situation later.


Wait before Trading

If you can manage it, hold on to that old car for awhile and continue to pay down the loan. Eventually, the debt and value will normalize and you can then get back on top of your financial situation. The down side comes if your current vehicle has high mileage, or needs a lot of repairs. That means you might not get much value out of the vehicle. However, if you are thinking of refinancing, just use those bigger payments to pay down your principal faster instead.


Roll Over Debt

This is similar to refinancing, but in this case you let the dealer selling you a new car roll over the extra debt you owe into your new car loan. This allows you to get your new car and drive it home, but carries the disadvantage of a higher principal and probably a much longer-term loan. You’ll pay more interest over time, which may not be ideal.



Some folks may consider letting the dealer or bank repossess their car. You will be out from under the responsibility for your old car, but put bluntly, this will destroy your credit rating and should not be considered in any but the most extreme of cases. This newly-harmed credit rating will affect your ability to get new car financing; at the very least you’ll end up with a sub-prime interest rate. At worst, you may not be able to get financing at all.

While none may be 100% ideal, there are other options besides refinancing if you are in an upside-down loan. With patience and research, you may even get back on top of your financial game.

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Refinancing Your Auto Loan

When you own a home, it’s a foregone conclusion that at some point you may consider refinancing your home. Refinancing gets you a better interest rate and Refinancing a carlowers your monthly payments. For some reason, however, few people consider refinancing their auto loans, which can have the same effect.

The Refinance Process

Refinancing a car is even easier than refinancing a home. The procedure for doing so is not much different—you take out a new loan, usually from a different lender, to pay off the principal on your existing one, and pay on the new loan, which preferably has a better interest rate.

The application process for an auto loan refinance is quick and easy, relatively speaking, so it never hurts to give it a go. Sometimes it can even be done at home on your computer. Even a small adjustment to your interest rate can make a big difference in your monthly payments and loan term.

Who Should Refinance?

If you are stuck with a high interest rate, you should consider refinancing. This approach can be especially good for those with credit problems due to bad or no credit, those who are recently unemployed, and those who are currently in a variable interest rate situation.

If you have more debt than when you purchased your vehicle and lower monthly payments would help, or if prime rates are much lower than when you first bought the vehicle, refinancing can help.

If your current loan is in good standing—you haven’t missed any payments—it doesn’t hurt to take a go at refinancing your auto loan.

Things to Beware

Look over your original loan terms before engaging in a refinance offer. Some loans carry fees for paying the loan off early, and there is almost always a fee for changing the title from one lender to another.

Remember, your lender has a lien against your vehicle, meaning they own it until you pay it off. The title will need to be transferred to the new lien holder. These fees, however, usually only amount to a few hundred dollars at most and your new lender may be able to help out with the costs.

If you are considering refinancing your auto loan, check out some of the lenders you may have looked at the first time around. Look at your local bank or credit unions, or specialty car loan dealers. Shop around for the best rates, and go for it—all you have to lose is hundreds to thousands of dollars in monthly payments!

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Three Scenarios When Refinancing Your Auto Loan Makes Sense


Let’s face it: we live in a credit-based society. You need credit to do just about anything from purchasing an appliance to buying a house. We also live in a society where in many places owning a car is almost a necessity. Since the economy is so difficult these days and it can be so hard to keep a solid credit rating, many folks obtain financing for a vehicle at less-than-ideal interest rates. There are, however, situations in which it can be advantageous to seek a refinance deal for your auto loan.

Lowering Interest Rates

The economy is in flux right now, with interest rates on a trampoline of up and down. If you can catch it at just the right time, when rates are at a low point or down swing, you could save significant money on your monthly payments. This works in a few ways. Firstly, the obvious: rates have gone down. If you financed at 11% and rates have dropped by 4 points, you could refinance at 8% or less, saving at least 3% on your overall payments.  Remember, though, that refinancing your auto loan generally counts as used car loans rather than new, so even if you purchased your car new, it will now be financed otherwise, which means slightly higher rates overall.

Improvement on Your Credit Score

It’s possible that when you purchased your car your credit score was less than ideal. Perhaps it was your first big purchase and you had no credit score to speak of. Perhaps, like many folks, you simply had a few black marks on your credit rating—a missed bill here, a late payment there. Now, however, several years have passed and you’ve gotten your credit score in top shape. It might be an ideal time to refinance, as with a higher credit score you’ll most definitely score a more advantageous loan rate.


Perhaps you’ve taken on a lease agreement, to take advantage of lower monthly payments, but now your lease is up and you want to buy the car outright. This is almost always an option, but standard agreements continue the payment structure as it was, which may not always be the best interest rate. You might want to look at other options for refinancing—the dealer may not renegotiate the rate, but third-party lenders can often be a source of lower-interest loans that can be used to buy your vehicle at the end of a lease.

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Keep More of Your Money in Your Pocket with Car Refinancing


Do you find yourself in a situation where you are struggling to make the monthly payments on your auto loan? Are you looking for a way to save cash every month? If so, there is a simple solution that can end all of your financial woes. Car refinancing allows you to keep more of your money in your pocket every month just by renegotiating your loan terms. Since interest rates can change from one day to the next, just like your credit score, you want to make sure you take advantage of any changes that occurred and maximize your savings. Consider some of the following ways refinancing your loan can help you save.

Flexible Payment Terms

Many people have found that refinancing their auto loan provides them with more flexible payment terms. As an example, let’s say you purchased a new car under a short-term loan of maybe two to three years. You might find that the payments can be somewhat expensive and difficult to make. In this situation, refinancing your loan will allow you to reduce your monthly payments and keep more of your money in your pocket.

Save Money on Interest

For some individuals, they purchased their vehicle when there credit wasn’t at its best. As a result, the interest rate and payment terms weren’t exactly ideal. By making timely payments and building your credit, you are eligible to refinance the loan and get new payment terms that are more in line with your situation. Reducing the interest rate on your loan can save you more than what you might realize when it comes to your auto loan.

Renegotiating Your Lease

If you found yourself in a lease that is less than what you expected, refinancing might be the best way for you to get out of it. You can use refinancing to actually buy the lease out. In turn, you are going to make all of your payments to the actual lender instead of the leasing company. In addition, when the payment cycle ends, you are actually going to own your vehicle. Not only are you saving money by renegotiating your terms, but you are actually working towards a final goal of owning something.

If you are worried about getting approved for car refinancing, don’t be. The process is extremely simple and quick. All you have to do is submit the application through RefiPayment and you can be approved in a matter of just a few minutes. At RefiPayment, the process is simple, convenient and quick. We work hard to get you the auto refinancing you need so you can keep more of your money.

Our team of specialists will walk you through the process from start to finish, so you don’t ever have to feel confused or unsure of what you should be doing. The process is straightforward. We don’t complicate things for our customers. Knowing what you are going to get ahead of time is important, which is why we have an auto refinance calculator that allows you to see what you are going to get when you refinance your loan with us. In a matter of seconds, you can see just how much money you are going to save on your auto loan. It doesn’t get any easier than that.

You have nothing to lose and everything to gain. Apply now, or give our team of experts a call today and let us go to work for you.

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