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In This Article:
Read how auto refinance works, and how you can get the best deal. This article breaks the process down into easy-to-understand steps, which can help consumers with little or no knowledge of auto refinance.

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Harbor Credit Breaks Down Auto Refinance Loans

By: Colin

If you're paying too much on your existing loan, an refinance loan may be the solution. But, is refinancing right for you? Ask yourself three basic questions:

1. Did you obtain the original rate from your dealer who, at the time, offered refinance loans?

2. Is it possible that another lender, possibly a bank, may have offered a lower rate on your refinance loan?

3. Are you interested in increasing the equity of your car, reversing the "upside-down" trend of your car's value depreciating faster than you pay off the refinance loan?

If you answered 'Yes' to any of the questions above, then refinancing may make a lot of sense. And cents. With refinance loans, consumers everywhere are literally saving thousands of dollars over their loan terms. Consider this example:

You borrow $20,000 at a rate of 13.4% over a period of 5 years, and then refinance after four months to a new, lower rate of 9.1%. You save $2,350 over the remainder of the refinance loan term.

If you financed your car at a dealership, you probably paid an interest surcharge called Rate Participation. Dealers who offer refinance loans will generally make money on the interest you're charged by marking up the rate lenders provide. Sometimes this rate hike can be 3% greater than what a bank would have quoted you otherwise. In these cases, your current credit rating already qualifies you for a lower refinance loan rate, one that would have equated to lower monthly payments.

Fortunately, refinance loans involve a simple application, and can be completed online in a matter of minutes. This is followed by a phone call from a loan agent who verifies your refinance application and gets you a credit decision. The new lender then simply pays off your old refinance loan, and opens your new refinance loan at a reduced rate and payment. In the meantime, you'll receive some paperwork via post mail for your signature. The best refinance loans have no application fee, pre-payment penalties or hidden charges � what is commonly referred to as �no-obligation�.

But the financial world is not easy to navigate and obtaining the right refinance loan can be difficult. The easiest way to find companies offering the best refinance loans (and service) is to utilize the Internet. Look for sites that offer vast resources, including advice, tips, and general information about financing, as well as tools that make refinancing easy. These companies are usually the most qualified to meet all your unique financial needs.

Like your need to save money. Or, at least, to stop spending it where it doesn't have to be spent. refinance is a great way to do that, and the checklist below can help. You�ll not only save money, you�ll save time, something just as valuable as your cash. In just a few minutes, you�ll learn how to save hundreds � possibly thousands � of dollars over the life of your refinance loan. If have a high APR and want to lower your payments, this is an oversimplified process to do it.

Auto refinance loans can be broken down into five easy steps:

Step One � Begin with the refinance application

A typical refinancing online application is short, easy to fill out, and only takes a few minutes. Never fill out an application that isn�t advertised as �secure.� This will ensure that the information you submit is protected.

In most cases, if you submit your refinance application during regular business hours, a designated refinancing loan specialist will contact you with a decision promptly. However, if it is submitted at any other time, for example on the weekend, it may take a slightly longer before you hear back.

Step Two � The nuts and bolts of refinancing

Once your refinance loan application is approved, have the following information readily available:

�Name(s) on refinance loan
�Name(s) on car title
�Year, Make, Model, Class
�VIN#
�Exact Mileage
�Current Lien Holder
�Account Number
�Lien Holder Phone #
�Additional equipment in the vehicle (Auto refinance terms are affected by factors such as transmission type, 2/4-door, short/long-bed, CD player/changer, running boards, cruise control, power windows/door locks/mirrors/seats, rack, tilt wheel, etc.)

Step Three � Speeding the refinance process up

To expedite the refinancing process, have a copy of your driver's license, 3 personal references, car insurance, car registration, and/or original lease contract (if applicable), ready to fax to the refinancing loan specialist.

Step Four � Signing your refinance contract

Then, after speaking with a specialist, you'll be sent documents that must be returned with your signature. Once these documents are received by the lender, a payoff check will be sent to your existing lien holder.

Step Five � Closing the refinance deal

Finally, once the check clears and title is received, the refinance process is complete.

Auto refinance allows you to keep the car you love and get rid of the payments you don�t. Just follow these five steps to a better loan. So, start saving money, or lower your payments now.

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