Pierre Money Mart Blog

HOW TO REFINANCE AUTO LOANS?

Online auto refinancing gives people the ability to go into a dealership as a cash buyer, making them far less vulnerable to profit-seeking salespeople who often confuse customers with interest rates and monthly payments. While considering consumers of refinancing loan, they are of several kinds.  The Saver This type of customer is always keeping an eye on the Fed (Federal Reserve) and when interest rates drop, he begins shopping for a way to improve his personal financial picture. He may also consider refinancing when his credit score has improved, which could enable him to qualify for lower rates.

The Budgeter

This customer may have bought the car on a short-term loan say, two years. The payments are high but affordable. Now suppose this customer’s economic picture changes — he buys a house, for example — and his monthly expenses shoot up. He looks at that auto loan and wants to spread the payment out over a longer period of time. Refinancing the auto loan is just the ticket to do that.

The Lessor:

Many consumers find that they want to keep their car at the end of their lease. Knowing a vehicle’s performance, maintenance history and reliability can certainly be a plus. In some cases, however, the dealer is of no help establishing a loan. Doing a “buyout” — where the customer actually purchases the car and establishes a loan — is a smart move. It could simply be that people don’t know it is possible. After all, the only risk is the 5-10 minutes it takes to fill out the application. Make sure, however, that no points are charged for the refinance process. Remember, as the federal interest rate drops, auto loan rates follow.

HOW TO REFINANCE OTHER LOANS?

Home loans and lines of credit

If you have a fixed-rate home-equity loan, you most likely have a shorter term than your first mortgage and you’ve got the security of having your interest locked in as well as any potential tax savings from an interest deduction. Because they generally carry lower, adjustable interest rates based on the prime rate plus a number of points, there generally is no need to refinance them to take advantage of lower interest rates, he says. They take care of that by themselves. Because it’s a revolving line of credit, your required monthly payment varies as you pay down the debt or as you make purchases with the line.

Personal loans

Personal loans typically carry higher rates of interest and a short term. The decision to refinance depends on what kind of fees might diminish your returns. If you are a homeowner, he advises comparing the advantages of refinancing a personal loan as a home-equity vehicle rather than at the personal loan rate.