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Refinancing Your
Auto Loan Can Save You Money
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Record Low Interest Rates Makes It A Great Time For Auto Loan Refinancing!
It is no wonder that auto loan refinancing has suddenly become a hot
topic of conversation. Record low interest rates, like those seen since
the start of the 2000s, always leads to record high refinancing rates.
However, when many people think about loan refinancing for a lower interest
rate, they only think of their home mortgage loan.
While your home mortgage loan is the largest debt you will ever carry,
and refinancing it to a lower interest rate will undoubtedly save you
the most amount of money, this does not mean that it might not also
be a good idea to refinance your auto loan.
Today’s automobiles are not cheap; therefore auto loans today are usually
large enough to make it worthwhile to consider auto loan refinancing.
The average auto loan taken in America today is $20,000. Refinancing
a loan of that size to a lower interest rate can save you a sizeable
amount of money paid out in interest.
At the end of the year 2000, the average interest rate on auto loans
was 9.25%. If you took a $20,000 auto loan at 9.25% interest and refinanced
it with a new loan at today’s rate of 6.9%, you will save $1,500 over
the life of the auto loan. That’s a huge savings!
One of the reasons that consumers don’t think of refinancing their auto
loan is because they are usually short term loans. The American economy,
and the interest rate being offered, is not usually volatile enough
to change much during the life of an auto loan.
However, more expensive autos, and larger auto loans, usually means
longer terms to the loan as well. The longer term, combined with the
current volatile market in America, means that more consumers will be
holding an auto loan during a period when interest rates have decreased
enough to make refinancing your auto loan a great choice.
Chances are good that if you have been holding your auto loan for more
than a year, you might be able to refinance the loan to a lower rate,
saving you money on your monthly payments, as well as lowering the total
amount you will have paid for the auto by the time the loan is paid
off in full.
Whether you are considering refinancing your home mortgage or your auto
loan, it is important to realize that refinancing is never free. Therefore,
you must always compare the costs of refinancing against the savings
you will realize from the lower interest rate.
When refinancing a home mortgage loan, there are a lot of costs that
will have to be factored in. While refinancing an auto loan is not as
costly, there are still some costs to keep in mind.
Since the title of the auto is held in the name of the lender until
the loan is paid off, you will need get a title transfer to transfer
it from the original lender to the refinance lender. When getting quotes
from lenders on auto loan refinancing, be sure that the quote also includes
any lenders fees and costs. In short, it’s important to have all of
the information before determining if auto loan refinancing is the right
choice for you.
About The Author:
Peter Dobler is a veteran in the IT business. His passion for experimenting
with new internet marketing strategies leads him to explore new niche
markets.
Read more about his experience with credit and mortgages; visit
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