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[B85]Bad Credit Auto Refinance Loans

by Colin Ayres, Col

1.Did you obtain the original rate from your dealer who, at the time, offered auto refinance loans?
2.Is it possible that another lender, possibly a bank, may have offered a lower rate on your auto 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 auto refinance loan?

If you answered 'Yes' to any of the questions above, then auto refinancing may make a lot of sense. And cents. With auto 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 auto refinance loan term.

If you financed your car at a dealership, you probably paid an interest surcharge called Rate Participation. Dealers who offer auto 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 auto refinance loan rate, one that would have equated to lower monthly payments.

Fortunately, auto 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 auto refinance application and gets you a credit decision. The new lender then simply pays off your old auto refinance loan, and opens your new auto refinance loan at a reduced rate and payment. In the meantime, you'll receive some paperwork via post mail for your signature. The best auto 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 auto refinance loan can be difficult. The easiest way to find companies offering the best auto 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 auto 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. Auto 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 auto 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 auto refinance application
A typical auto 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 auto refinance application during regular business hours, a designated auto 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 auto refinancing
Once your auto refinance loan application is approved, have the following information readily available:
?Name(s) on auto 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 auto refinance process up
To expedite the auto 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 auto refinancing loan specialist.

Step Four ? Signing your auto 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 auto refinance deal
Finally, once the check clears and title is received, the auto 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 auto loan. So, start saving money, or lower your payments now.

Go from dealership to dealership hoping for the best, usually settling on whatever vehicle they push you into?

OR get pre-approved and walk onto the car lot empowered and ready to do business on the vehicle of YOUR choice?

Obviously getting pre-approved is the best way to go! Bad credit auto loans are available through some very good lenders.

FACT: If you need a bad credit auto loan then getting pre-approved can save you an average 2% - 5% AND thousands of dollars in payments!

A Pre-Approved Bad Credit Car Loan Puts You In the Drivers Seat!

A pre-approved auto loan from a lender who specializes in bad credit auto loans, might save you between 2% and 5% (I know this because I used to sell cars in Phoenix Arizona).

Regardless of your credit score, being pre-approved for an auto loan gives you more options when you walk onto the car lot. Once you're approved for a car loan you are in the drivers seat! You are free to shop for the BEST vehicle in your price range!

Before you start shopping for loans though. Here's some helpful advice.

Know Your Credit History

Rates and terms will vary depending on your credit scores. This can mean the difference between a new vehicle or a used one; a vehicle with a lot of equipment or one that's a little scaled back. Before you assume you need to deal with a creditor who specializes in bad credit, check your credit score.

Leave Room For Warranties and GAP

With all the computer equipment on cars nowadays what used to be a simple fix is now very complex. The average mechanic bill on a vehicle today can be over $400. And that's for something simple like a window motor! So negotiate a warranty into your purchase!

GAP insurance pays off the difference between what you owe on the vehicle and what the insurance company gives you if your car is totaled. This is a must have for any financed vehicle today!

Most bad credit auto loan lenders will give you "room" to put in these items. For instance, if they approve you for $10,000 they will really give you about $13,000 (as long as you are covering tax, title and fees and/or purchasing an extended warranty or GAP).

HOWEVER, each lender is different so you'll want to ask if they are allowing for this kind of bump up before you start shopping. If they won't then you will need to shop for a vehicle that is about $2,000 to $3,000 less than your approved-for amount so that you can purchase an extended warranty and GAP insurance.

Take Your Time And Find The Vehicle YOU Want At A Reasonable Price

Just because you have bad credit doesn't mean you should be forced to buy the worst vehicle on the lot! If you're shopping for a used vehicle ask them for a Car Fax report. If they won't give you one then don't buy the car. Always be an informed buyer!

Don't shop for more vehicle than you're approved for and think you're going to negotiate it down to your pre-approved amount! The best way to know a good value on a used vehicle is to ask for a Kelly Blue Book sheet. A good price should fall between wholesale and retail price. Don't let the lender sell you a vehicle for more than it's real value! Make a reasonable offer of between wholesale/retail value and if they won't do it then move on. Also, if they won't share Kelly Blue Book information with you then leave and go somewhere else. That's the power of pre-approval!

Another great feature to pre-approval is that the bad credit auto loan lender won't let you have a car that falls outside the Kelley Blue Book "book value." So if a dealer is trying to hustle you once he finds out you're pre-approved (and won't let him pull your credit to get you a loan himself), he'll help you to find a vehicle that is safe, reliable, and not an overpriced rip-off!

Know Your Trade-In Value

Most bad credit auto loan banks will give you an estimate on what you're vehicle is worth as a trade-in. Also you can check it out for yourself on http://kbb.com. But remember, Kelly Blue Book is just a tool. Car dealerships also look at auction reports to see what your vehicle is selling for on the open market in your area. Don't let the dealership trick you into a low trade-in value, but don't ask for the max either. Kelly Blue Book fair trade value is a fair price. If you can get more from a local source then by all means, go that route. But if trade value ranges fro $4,000 to $8,000 don't ask for $8,000 (unless your car is a museum piece that's never been driven it's probably not worth the max amount).

So, if you're ready to get shopping get yourself pre-approved for that car loan and have fun shopping like a pro! Good luck and good shopping!

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About Author

Both Colin Ayres & Leslie Kearney are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Colin Ayres has sinced written about articles on various topics from Cars, Used Car. Colin Ayres is a writer for Harbor Credit. He began his career shortly after graduating from Yale University, where he soon realized that Liberal Arts and copywriting have a lot in common. To read more, visit. Colin Ayres's top article generates over 4400 views. to your Favourites.

Leslie Kearney has sinced written about articles on various topics from Bad Credit Loans, Cover Letter. Leslie Kearney is a web author and owner of . For the past 3 years now she has been providing expert advice and resources for people with bad credit. Leslie Kearney's top article generates over 9900 views. to your Favourites.