How to Consolidate Car Loans

If you have more than one car loan you may want to consider consolidation. Consolidation allows both cars to be on the same loan with one interest payment. That alone could save you money, but most consolidation companies want your business so they offer you a lower interest rate. Just by consolidating you can save over $100 or more per month. Read on to learn how to consolidate car loans.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Auto loan information (such as payoff amount and interest rate)
• Computer
• Internet
• Telephone
• Piece of paper
• Pen or pencil

1. Get out your car loan documents and write your current interest rate down on a piece of paper. Call the toll-free number related to your loan to find out the payoff amount. Almost all 800 numbers will give you this information. If you can't get it automated than ask for an operator. Write the payoff amount on your piece of paper.
2. Check the rates of a few companies. This gives you some companies to compare and then contact for the best deal. Two good auto consolidation companies are Capital One Auto Finance and HSBC Auto Finance. Start with them first. You can type their company name in to Google and get their website and phone number.
3. Consider the website Firs Again. You can only use this company if you have a good credit rating, but they are so worth it. They pay off your car loans and offer you a loan at a discounted interest rate. Their interest rates are good and always lower than what you are currently paying. Then you would have your loan with them and you wouldn't have to worry about the other companies.
4. Apply at your local bank. If you have been banking at one institution for any length of time and your accounts are in good standing there is a good chance your bank will give you a loan to pay off your car loans. If one car loan is $12,000 and the other is $8,000 you would want to borrow $20,000 at a lower interest rate than what you are currently paying. Then both cars are paid and you pay the bank back less money than you would if you left your two car loans the way they were.

Tips & Warnings

• Don't just look at one company. Comparing rates gives you an advantage. If company X is offering you 8 percent interest and company Y is offering you 6 percent you can negotiate with company X to see if they can match that rate or beat it.
• Always check out the company with the BBB to make sure they are not a scam. There are too many fake companies out there for you not to do your homework in this area.