In this post-pandemic era, people may be putting great efforts into saving money. Some may consider refinancing their car loans to do so. It is very understandable when people turn towards this option because the current situation has led to an extreme financial crisis. Wondering if you should refinance your car right now or not? But, Keep in mind that any abrupt decision made in a crisis can lead to everlasting regrets. 

Refinancing With Different Loan Terms 

Do you wish to lower your monthly payments due to financial complications that have surfaced due to COVID-19? Don’t rush to refinance your car loans for this purpose. Refinancing means taking out a new loan with a better interest rate or a longer-term, replacing the current auto loan. People choose to refinance to reduce their monthly car payment amount. 

Refinancing requires you and your vehicle to qualify a set of requirements. If you wish to pause your monthly payments due to coronavirus, then it may be impossible. However, you are most likely to qualify for a longer-term loan plan only. And it would cost you more than the actual loan balance. 

Qualifying To Refinance a Car Loan 

If you wish to qualify for a refinanced loan, your previous loan must be at least one year old. Besides, your credit score must have improved since then. You must also have equity in your vehicle. If you don’t meet these conditions, consider yourself unfit for refinancing. 

In addition to this, your vehicle must have a good mileage (probably less than 100 000). Your car must also have an age that fits the lender’s criterion, and they must also agree to pay off the loan balance. Every lender looks for varying qualifications, so not every lender is right for you.

The last condition is to be actively sending your monthly car payments. If you end up missing even a single payment in COVID-19, then you are not fit for refinancing. But, such an option would help you greatly in draining times like these. 

Alternatives to Refinancing

The bitter truth is that refinancing is not for every borrower out there. The good part is that the lenders are kind enough to help the borrowers with any needed help, especially when the global economic situation is going downhill. Give a valid yet true reason for your missed monthly payment to the lender so that you end up on the good side of the lender. 

It is crystal clear that every lender tries their absolute best to prevent loan default as much as you do. Because of the global pandemic, lenders have granted slight leniency in this regard. Many borrowers also try to postpone the monthly payments that they weren’t able to wear. It doesn’t allow you to forget about the missed payment because you will be paying this amount at the end of your loan. 

Ideally, the deferment lasts for about 30 to 90 days, conditional to your and the lender’s current situation. But due to the COVID-19 pandemic, changes have been made to this time limit. Some lenders are lenient enough to give a 120-day deferment period to their customers. Contact your lender to avoid any confusion regarding your monthly payments. You can also ask them what the deferment limit is in their case. 

If the above suggestions don’t help you save, trade in your car for something more affordable. It is the only route that would help you ease the strain of auto loan payments. 

Find a Dealership near You

Have you accepted trade-in as the ideal option for you? And now you don’t know how to initiate the trading process? We have got your back! We, at CarLoanRefinancing, are interconnected with a network of reliable and user-friendly dealerships. They specialize in aiding credit-challenged customers with the best suggestions and deals ever.

We know, looking out for transportation may not be on the top of your priority lists, but it is a basic need. You can start the buying process by navigating through online car ages and selecting the ideal car for yourself. And when the current situation subsides, you can contact us, and we’ll arrange the best lender.

The simple answer is yes! Refinancing does save you money on your car loan, depending on how you choose to refinance your car loan. Let’s learn how refinancing works and about all the must-knows regarding refinancing. 

How refinancing saves you money 

As refinancing can save you money on your car loan; the best part of the refinancing is that you can refinance in two methods:

• By increasing the loan term 
• By decreasing the interest rate

You can also find a new lender for refinancing or stick to your previous one. 

Refinancing is a process that allows you to replace your original loan with another one that offers terms that are ideal for current financial conditions. Your new lender pays off the previous loan balance on your behalf, and then you start to finance your vehicle.

If you increase the loan term, it will lower each month’s payment because you will pay for a longer time. But it would result in enhanced interest charges over the lifetime of your loan. On the other hand, if you decrease the interest rate, you lower the monthly payments.

Borrowers also have the option to refinance in both ways. But for this purpose, you have to fit the specific set of requirements as proposed by the lender. 

Requirements for refinancing a car loan 

Depending on each lender, the requirements vary. But most lenders have the same qualification criteria that need to be filled. Here are the most common set of requirements. You must be fulfilling these:

• You have a one-year-old car loan. Lenders are most likely to reject refinancing your loan if it’s less than a year old. The reason is that in such a short time, the payment history isn’t established. 
• You are actively paying monthly payments. Lenders also don’t refinance the car loan if you have missed any monthly payment from the previous loan. Besides, not being up-to-date with monthly payments also leaves a rough impression on the lender. 
• You have a good credit score. Having a good credit score is a must for refinancing. However, you can take out an original car loan with bad credit also. But if your credit score has progressed within the year, you may end up refinancing your loan. 
• Your vehicle is fit. You must have a car with a mileage of fewer than 100 000 miles, and it should be less than 10 years old as well. Or else many lenders refuse to refinance.
• You have equity in your vehicle. Lenders will never refinance your car loan if the car has negative equity. It is being upside down on your car loan. However, the only way to fix it is by waiting and paying off the previous loan balance. 
• Your loan balance is not too much. This factor largely depends on your lender’s preference. If they are willing to give out a large loan, then they may help you in refinancing. Most lenders have set a maximum and minimum limit for refinancing, so definitely check it out before proceeding. 

If you fail to fit in these basic sets of requirements then sadly, you can’t refinance right now. Some ways would help increase your chances of qualifying for refinancing. They are: patient, improving your credit score, and paying monthly payments on time. 

Once again, all lenders and conditions are changing. Take some work on the things mentioned above, and you’ll find the right lender for yourself real soon. In addition, rate shopping is time-consuming as well. However, if you wish to lower your monthly payment, consider talking with a bunch of lenders. They may be helpful and offer you suitable deals. 

Can’t refinance? This is what you can 

If your vehicle’s current situation doesn’t allow you to refinance right away, consider trading in your car. It would remove the problem of paying payments every month. 

We have teamed with a skillful and reliable network of dealerships all around the nation. We, at CarLoanRefianncing, also work with subprime lenders, who actively help credit-challenged borrowers. With us, nothing can stop you from refinancing or trading in a car. 

Most of the time, after separation, assets get split between the ex-spouses. But what happens to the car that was bought collectively by the then-husband and wife? Does only one person drive it when there are two names on the title? Wondering how you can get your name off the car loan after divorce? Read this blog further to know in detail.

How Can I Get My Name Off A Car Loan After Divorce

Even if you do not possess the car that was co-borrowed by you and your ex-spouse co-borrowed, it may still influence your credit score. It is because if your ex-partner, who is currently using the vehicle, misses a single payment, it will directly ruin your credit score and theirs as well. Even if the divorce papers consider the spouse responsible, it doesn’t matter because there are two names on the car’s title and the auto loan. The same custom is applicable when it comes to default possession and repossession. You both will face a drastic decrease in your credit scores. 

However, you can take off your name from the car’s title and the loan as well. It is possible through the refinancing process. Refinancing allows you to transfer the possession to either one of the partners by making them the sole owner. 

Refinancing the car is the only possible method to remove a co-borrower from a car loan. However, for this purpose, your ex-spouse must fulfill all the required qualifications. 

Qualifying for Refinancing 

To evaluate whether your ex is eligible to refinance an auto loan and help you remove your name from the title, you need to look out for a few things. Auto loan lenders require varying qualifications, but we have handpicked a few basic ones. 

• There must be equity in the vehicle
• The original auto loan must be a year old
• The car’s mileage must be less than 100 000 miles
• The vehicle must not be older than 10 years. 

If the car fits this criterion, then your ex-partner can succeed in getting the car refinanced and thus help you remove your name from the car’s title. 

Besides the car requirements, some income requirements also need to be filled. If the ex-spouse doesn’t make monthly payments timely, you will be unable to cut out your name. 

Changing the Loan Terms

Refinancing means replacing the original auto loan with a new one. The vehicle remains the same, but the loan amount, interest rate, and loan period may change. People usually opt for refinancing to pay reduced monthly car payments. They do so by getting a loan with a better interest rate or stretching out the loan period. Through refinancing, your ex will be able to remove your name from the title and get a manageable loan by adjusting the monthly payment routine as well.

The good news is that if your ex’s credit score has gotten better since you both have taken out the loan, then they may get a low-interest rate loan instantly. Refinancing is a lifesaver when it comes to reducing interest charges throughout the loan period. 

Another alternate way to refinance your car is by stretching out the loan’s original length. Extending a loan is not ideal when aiming to save up throughout the loan. But it helps in lowering each month’s car payment.

Your ex-spouse has the option to refinance through both means. Through this strategy, they will succeed in removing your name from the car’s title, lower the monthly car payments and thus afford the car on their own. 

Getting Another Car After Divorce

It’s clear that after separations, credit scores hit rock bottom because finances tend to split. Besides, divorce matters cost a fortune as well. There is a possibility that you may end up without a vehicle. And a bad credit score would make it even harder to get new transportation. But nothing is impossible with CarLoanRefinancing. With our able lenders, you will get a new vehicle within less than a week!

If you are searching to take out a new auto loan, then contact us. At CarLoanRefinancing, we are partnered up with a competent network of dealerships throughout the nation. We will help you find the ideal auto loan that will leave you with no regrets.  

If you consider refinancing your car because of the high-interest rates, make sure that you and your vehicle fit the eligibility criteria. If there are unfavorable circumstances and it is not possible, then decide on trading in your car. There is no other better option than trading in. 

How Refinancing Your Car Saves You Money?

Refinancing aims to help you save money from every monthly car payment by lowering them. There are two ways to achieve this goal through refinancing:

• By qualifying for an auto loan with a lower interest rate.
• By extending it to a long-term loan.

If your primary goal is to save up, the first option suits you the best. If you end up being qualified for a low-interest loan, you will be able to save a significant amount of money over the long run of your auto loan. 

On the other hand, extending a loan works well when you aim to save money monthly. Be aware that you will not see a considerable amount of savings from the overall loan unless you don’t qualify for a loan with low-interest rates. You end up expending more than your original car loan on a stretched loan because of the unchanged interest rate and extended length. 

You could save up if you qualify for an extended loan with lower interest rates. Now let’s learn what the requirements to get your car refinanced are. 

Am I Qualified To Refinance My Car?

The refinancing process is similar to when you take out the original car loan. You have to meet some requirements to get your vehicle refinanced. 

People with good credit are most likely to choose to refinance as it benefits them. If you took out the original loan with a bad credit score and managed to better it over time, then you may qualify as well. You can only refinance your car if it’s been at least a year since you have had the car. If you haven’t hit the one-year mark yet, then work on enhancing your credit score over this time. You qualify to apply for refinancing once a year has passed. 

Besides you, your car also has to meet the lender’s requirement to get accepted for refinancing. Lenders have set differing demands when it comes to the vehicle. The most common ones are:

• Good mileage (less than 100 000 miles) 
• Acceptable age
• Equity for the car (negative equities are discouraged)

Additionally, you have to be up-to-date with your current loan payments. Lastly, your desired amount of loan must be okay with the lender as well. Since the requirements vary, you have to search for the lender that fits your needs the best. 

How Trading In Your Car Saves You Money?

If refinancing didn’t work out for you, trading in your car with something budget-friendly could be a better option. You can trade in your vehicle even if you don’t have the perfect credit score. There are many subprime lenders throughout the states that can help you with your struggles. 

Surprisingly, you can change the equity for your car in a down payment. It removes the worry of bringing money for the down payment. 

If you find trading in the right choice for you, learn about your credit score and your car’s estimated worth. You can request an uncharged credit report through several online portals. 

You can also use online sources to find your car’s estimated worth. It will help diminish any confusion and worries. During all this, don’t forget to contact your lender and request a 10-day payoff amount. It ensures that there is equity in your vehicle. 

Ready To Refinance Or Trade In Your Car?

Markdown all the requirements of a lender you would like to work with, so we can lead you on your refinancing journey from now on. You can lookout for a lender on our website. However, if you find refinancing unworkable for you, it is okay. 

Here at CarLoanRefinancing, we help you find the finest dealerships in the nation that favor you in an odd situation. Now you can avail the best deal even with no credit, bad credit, and bankruptcy!

To answer the previous question of ‘Is refinancing a car loan a bad idea.’ Well typically, borrowers refinance their vehicle loans to lower their monthly payments. However, refinancing isn’t always the best option. It may be more cost-effective to pay off your existing auto loan rather than refinance it in some cases.

When is Refinancing the Best Option?

If you think you qualify for a refinance, here are some scenarios where it would not be a good idea to do so right now:

You are only eligible for a loan with a longer duration.

If you apply for refinancing and cannot obtain a lower interest rate or a longer loan term, it may be a terrible decision to proceed. Most auto loans follow a straightforward interest formula. Therefore, the longer the period, the longer it takes to pay off the debt, so you’ll end up paying more in interest.

The loan term ends.

Many auto lenders prefer to refinance automobile loans at least a year old and not nearing the conclusion of their term. If you are close to putting an end to your loan and you have a lot of equity in your car, it might be a better idea to trade it in for something else and utilize the equity as a down payment on your next vehicle.

Previously refinanced

If you’ve already refinanced your vehicle, it might not be a wise idea to do it again. Remember that cars lose value with time – the more you drive them, the more wear and tear and mileage they accumulate.

Furthermore, if you keep extending the length of your loan on the same car, you may end up paying more for it than it is worth.

Refinancing a Car Loan: All You Need to Know

The first step in assessing whether refinancing is a brilliant idea for you is to see if your auto loan and vehicle are eligible. Almost typically, the goal is to minimize the monthly payment and maybe save money in the end.

The refinancing lender pays off the previous one, and you start a new one with fresh loan terms and maybe a new interest rate on your current vehicle. Some consumers ask their existing lender to refinance, but many others hunt for a better deal elsewhere.

A credit score of about 660, a solid one, is usually required to qualify for refinancing. Refinancing also necessitates the presence of equity in your car. You must value your vehicle at least as much as the amount you owe on your loan.

Is refinancing a car loan a bad idea?

Refinancing isn’t for everyone, and it’s certainly not a choice for every vehicle. Most dealerships, on the other hand, allow trade-ins for operating cars.

If you want to have a lower monthly payment, but your circumstances don’t allow you to refinance, it can be a brilliant idea to trade it in for something more inexpensive.

Do you require assistance with auto financing?

Are you ready to get a new car loan? Have we answered your question of ‘Is refinancing a car loan a bad idea? We hope that we have.

With our nationwide network, we hope to make finding a dealer easy for you. CarLoanRefinancing has collaborated with dealerships across the country to help borrowers with bad credit acquire the auto loans they need. Fill out our free auto loan form to connect with a dealer near you.

Auto loan refinancing targets to help you save a hefty sum of money from your monthly loan payments. Borrowers who took out a bad credit car loans are most likely to save some cash as well.

An Outlook on How Refinancing Saves Your Money

Borrowers who aim to refinance their auto loans are probably searching for ways to cut down their monthly car payments or lower their per-month interest charges. Typically, a bad credit score results in higher interest rates, but you also have another option. Try improving your credit score, so you can be eligible for a loan with a lower interest rate.

Generally, two methods will help you save money by refinancing your vehicle. They are:

By taking out a loan that has lower interest charges  

Or

By getting an extended car loan.

Bad credit car loans borrower often find their interest charges in four digits. It will lead to a pile of heavy interest charges. Take a look at this table to understand how much interest you may be paying and how the loan term may affect your actual rate:

The most common and ideal way that helps you refinance is finding a new loan with lowered monthly car payments. Generally, lots of these charges add up and result in a large amount that costs more than the vehicle. However, extending the loan term at the current interest rate will put you in tight shoes, and you will not succeed in saving any cash.

Both options of refinancing are workable for different people. Some people refinance with a long-term loan with lowered interest rates. Regardless of the situation, it helps you save money, depending on your new loan terms.

How To Refinance My Car?

To refinance your auto loan, you must look for a new lender. It may be an online lender, a new lender, or the same previous one. Borrowers search for different lenders to find a suitable one who agrees on lowered interest rates and extending the loan term. 

Coming towards requirements, you must have good credit even if you took out the original loan with a bad credit score. The lenders would most likely lend you the loan if your credit score is good now or has significantly improved. Even if it’s not perfect, it will help you meet the eligibility requirements for auto loan refinancing. 

Remember, having a good or better credit score is not a free pass to loan refinancing. Other requirements vary from lender to lender. However, here is a list of the top four objectives that are a must:

• You are currently paying your monthly car payments while having a good payments record.
• Your vehicle is not older than 10 years and has a mileage of less than 100 000. 
• You have put equity in your car.
• You have had the original auto loan for a one-year minimum. 

If you consider yourself fulfilling all of these requirements, then start applying for loan refinancing. You can also use our free online car loan refinancing form to get enrolled. Our trustworthy partners will give a helping hand to find a suitable lender for your car refinancing with bad credit. 

On the contrary, if you consider your vehicle unfit for refinancing, then consider trading in. Even if your credit score isn’t good, it is another workable route for you. For this purpose, you may need to consult a subprime auto lender. 

Connect With Dealerships and Subprime Auto Loan Lenders

Bad credit car loans might make things miserable for you. However, subprime auto lenders consider other important factors besides just your credit score/history. They are more likely to analyze your stability, current income, willingness to pay off the loan, etc. 

CarLoanRefinancing is known for providing services nationwide with the help of dealerships that are interconnected with a large number of subprime auto lenders. If you desire to connect with the nearest dealership, feel free to fill our car loan request form.