The following post originally appeared on our RoadLoans blog, The Open Road.
Refinance is an idea we’re accustomed to hearing in connection with a home mortgage – especially in recent months with interest rates at historic lows.
But consumers may not be as familiar with refinancing in connection with a car loans.
Still, refinancing a car can be a smart move for the same reason someone would refinance a house – reducing the monthly payments and freeing up income for other uses.
“Say you bought a new car two years ago and there were a few dings on your credit. You might have been charged 9 percent on a five-year loan for a $23,000 car. Your payments are probably about $525 a month,” writes Philip Reed, senior consumer advice editor here at Edmunds.com.
“Now let’s say your credit has improved, and so have interest rates on car loans. You could now refinance the balance of your car loan at 3 percent and lower your payments to about $445 a month for the remaining three years. That’s a savings of $80 a month and $2,880 over the life of the loan.”
While the numbers usually aren’t as dramatic as those you would encounter on a mortgage refinance, $1,000 a year in savings would go a long way toward paying other bills.
Average interest rates on used and new cars currently are reported around 3 percent on Bankrate.com.
And a car refinance isn’t as complicated as house refinance – you can get approved in minutes by lenders such as RoadLoans.com, which also specializes in borrowers with dinged credit.
“The process is much easier than when you first signed for your car loan,” says RoadLoans.com. “It is easy to apply online and many companies allow you to either sign for your loan online or print out the loan documents and sign them. You still have to make copies of your important documents – pay stub, phone bill, etc. – but this time you can do it all either online or through the mail.”
“I was very nervous about refinancing my loan, especially online!” wrote Laura R., a recent RoadLoans.com customer, in an online review. “RoadLoans.com made the whole process so easy and the paperwork was user-friendly with a helpful checklist! I loved the quick email communication to keep me posted on the progress of the loan with a real person. I would use them again when I need a loan, and would highly recommend anyone to them. So happy I used them.”
“I am a satisfied RoadLoans.com customer,” added Gary C. online. “I was able to get approval for refinancing my car. The associates at RoadLoans made it easy to refinance. Thanks RoadLoans.”
If you need fast-and-easy vehicle financing for a used or new car, SUV, crossover or pickup, visit www.RoadLoans.com to get the process started.