How to Tie Auto Loans in to One Bill
Consolidating auto loans can reduce required monthly payments if executed properly. Banks and other lenders offer affordable consolidation loans to customers with good credit. Individuals with bad credit ratings will find it challenging to consolidate auto loans in an affordable manner. Consolidation loans are usually unsecured personal loans, so the rates offered can be higher than those for conventional auto loans, which are secured by the vehicle. In most cases, the borrower facilitates auto loan consolidation by offering the vehicles as collateral for the new loan.
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Instructions
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Find your auto lenders' contact information on your monthly bill. Contact your current auto lenders and ask what the "payoff amount" is. Record these amounts for later use. Take note of the current interest rates on your auto loans so that you can compare them to others when you're looking to consolidate the loans. Calculate the average interest rate by adding them together and dividing them by the number of loans that you want to consolidate. This average percentage is the interest rate that you're trying to beat by acquiring a consolidation loan.
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Contact banks and credit unions to ask for details about consolidation loans. Lenders are often more willing to give out consolidation loans than personal loans because the borrower can demonstrate that he is currently able to make regular loan payments. As you negotiate the terms of the loan, offer to provide the cars as security. This will almost certainly win you lower rate offers, as it reduces the risk of the lender considerably.
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Compare interest rate offers from multiple banks. Consolidation loans are not as widely advertised by conventional lenders as other types of loans, so this will require more effort than comparing standardized types of loans. Contact banks by telephone. Write a script outlining your auto loan situation and your need for a consolidation loan in a succinct manner. Explain your situation and the numbers involved (the interest rate you're looking to beat, the current payoff amounts of the loans) to each loan officer so you can get an interest rate quote as quickly as possible.
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Demonstrate to lenders how a consolidation loan will improve your financial situation and increase your ability to make loan payments on time. Construct a budget outlining your average monthly expenses. Explain how you intend to utilize the additional funds that you gain from saving money every month once you are approved for a consolidation loan.
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When you have found the best rates, finalize your consolidation loan application process. If you are organized and honest about your financial situation, you will increase your chances of gaining approval and saving money every month on your car loans.
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