How to Get a Better Interest Rate On An Existing Car Loan

If you have recently purchased a car and have taken out a loan at a high interest rate you may be able to do better. Here is how.

Instructions

1. Start shopping around for a better deal. There is usually another lender where you can find a better interest rates on a car loan. If you have just financed a car but at a higher interest rate than you think you should be paying you do have options. Usually there is no penalty for moving your loan to another lender.
   For example, if you bought a car at a dealership a couple of months ago and used dealer financing other than low promotional rates, your loan is most likely with a major bank such as Bank Of America or with an automakers credit company such as GMAC. There could be better alternatives.

2. Start with your home bank or join a credit union for which you are eligible. It is often more convenient to use dealer arranged financing but you can often get a much lower auto loan interest rate at your home bank or credit union.
   Credit unions can often have interest rates that are much lower than traditional banks for their members.
   In some cases credit unions will take members from any walk of life, not just teachers or firemen.

3. Don't wait too long before refinancing your car loan. Otherwise you won't get "new car" interest rates. Refinancing within a few weeks or months of buying a new or used car will usually result in you getting the same number of months to pay since the length of an auto loan is based on the year model and value of the vehicle.
   Call around and check on credit union membership requirements and auto loan interest rates at traditional banks and see if you can do better.
   If your credit is strong you should be able to do better, however just remember that the number of credit inquiries will lower your score so if you are borderline bad credit don't put in a number of applications for car loans until you have found the one bank or credit union with the best rate.