How to Lower My Interest Rate on My Auto Loan
A car loan can create a significant financial burden for anyone, even someone with a steady income and a low amount of debt. Hefty interest is tacked on to car loans. This can become frustrating for the borrower. However, you do not have to just settle for the given interest rate assigned to your car loan. Refinancing is an avenue for you to negotiate for a lower interest rate.
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Instructions
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Call the company that currently holds your car loan and ask them what the requirements for an interest rate reduction are and if you qualify for any reduction. These requirements could be an unexpected financial hardship, notice of a more competitive rate or whatever the company chooses.
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Call and search online for several banks, loan companies and credit unions and ask about interest rates on car loans.
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Write down all information given by each company. You may want to make a chart or comparison table.
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Visit websites such as Bankrate.com or CapitalOne.com to access car loan rate calculators and loan comparison tools available there.
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Choose a company and apply for a refinancing loan.
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Tips & Warnings
The best times to negotiate for a lower interest rate are when the government has lowered interest rates; when your credit score goes up; when you find another company with a better rate; when you are in significant financial distress; and when your lease has ended and you wish to purchase the car.
The process of refinancing is very simple. When asking for a loan, you should request more than the current amount of the loan to provide you with flexibitlty. You will be closing your current loan and switching over to the new loan at the new rate and terms. Refinancing can save you huge amounts over time.
Money saved from refinancing is best if put back into the car for repairs and maintenance.
There should not be any exorbitant fees involved in applying for a refinance loan. Be very cautious of shady businesses with many upfront fees for application. Those with bad credit should be especially watchful and avoid title loans and company that offer predatory loans with hidden fees.
