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Here’s the quick version. A cosigner is someone who guarantees a loan. The primary borrower is responsible for their monthly loan payments and has their name on the loan and asset, but should that primary borrower default, the cosigner would be on the hook for payments.A co-borrower is someone with equal status on a loan as the primary borrower. Both borrowers hold equal responsibility to make payments each month and have equal stake in the asset and responsibility for the loan.Read on for a more in depth look at the differences between these two terms commonly used in lending, plus why you might want a cosigner or co-borrower and how to add or remove one from your auto loan.The Difference Between Cosigning And Co-Borrowing: Your GuideCosigner and co-borrower. These words are sometimes mistakenly used interchangeably, but there’s a big difference between being (or having) a cosigner vs. co-borrower, so it’s important to distinguish between the two.In this guide, you’ll uncover the answers to the following frequently asked questions about cosigners and co-borrowers:What is a cosigner?What is a co-borrower?Is it good to have a cosigner?How can I remove a cosigner?How can I add a cosigner or co-borrower to my loan?Let’s take a closer look.What Is A Cosigner?A cosigner is someone who agrees to be legally responsible for a loan if the original borrower defaults on the payments. Cosigners essentially give lenders a guarantee that someone else will be responsible for payments should the loan agreement not work out as intended.Cosigners can be found on apartment rental agreements, personal loans, mortgages—really any type of loan or rental agreement. If a borrower is young and has yet to establish credit, it is common for a parent or loved one to step in and cosign until the borrower has built up their credit. If a borrower is just getting out of a bad situation, such as a bankruptcy or credit card debt, a cosigner may be able to help them get back on their feet. Many car lenders have the following requirements for a first time car loan:You must have a monthly income of at least $1,600.You must make a down payment of at least 20%.You must have a credit score of at least 680.You must have established credit and not have a credit utilization ratio that is higher than 50%.Lenders may require proof of stable work history in addition to this. If you are a first-time car buyer, these may seem like difficult requirements. Lenders will therefore allow you to get a loan if you provide a cosigner.There are a few requirements to become a cosigner on an auto loan:They must be willing to cosign and accept the responsibility of repayment if necessary.They must have good credit, generally above 700.They must prove they have a stable income that can pay for the loan if it defaults.They must prove their residence.They must prove their employment.Lenders will consider all of this information in conjunction with the original borrower’s application materials when determining whether or not to approve the loan. Becoming a cosigner is a huge responsibility. You should only cosign a loan for someone you love and trust. It is all too common for financial relationships to put a strain on personal relationships, so it’s very important to communicate with your loved one if you decide to cosign with them.What Is A Co-Borrower?A co-borrower, on the other hand, is someone who is applying for the same loan with you. You are agreeing to equal share in responsibility of the loan and of the asset. Your co-borrower’s name will appear next to yours on the loan and on the title of the car. Your finances will be looked at with equal weight, and you’ll both need to submit the requisite paperwork. A co-borrower is a good idea if you want to own your car with someone, such as your husband or wife. They will have equal ownership, which may be perfect for you. Is It Good To Have A Cosigner?In general, cosigning a loan is a very big deal and it is a decision that should not be taken lightly. But if you are having trouble getting approved for a car loan, asking a loved one might be your only option. Having a cosigner will help you in the following ways:You will be offered a better interest rateYou will have some time to build creditYou will have someone to help guide you and give you adviceBut being a cosigner for someone else doesn’t really have a lot of benefits for the other person, and asking someone to cosign a loan is a big deal. They are on the hook financially for your loan.Insurers in some instances will hold the cosigner responsible for claims.It can be a strain on personal relationships.Before asking someone to take on this responsibility, ask yourself if you really need the loan (i.e. do you really need to buy a new car). If you are trying to build credit and are confident that you will not default, then you should take the following steps to prepare for cosigning. Prepare ahead of time before you ask them to cosign. Gather your financial information so that you can answer any questions they may have.Schedule a meeting to ask them and discuss in detail. Having a meaningful and honest conversation ahead of time is important. Make sure they are aware of what being a cosigner means.Get a plan in place for repayment. This will help assure them that you can pay back your loan.Don’t expect an answer right away. Give them time to think about what you are asking. If your cosigner agrees, it’s important that you keep them in the loop on whatever is happening with your loan. If you need help with a payment or have a problem, be transparent with them. How Can I Remove A Cosigner?If you have a cosigner on your auto loan, you may be wondering if it’s possible to remove them. Generally there are three options to get untangled from a cosigner:Ask for a cosigner releaseSell your carRefinance your loanAsk For A Cosigner Release.In certain situations a lender may allow you to simply release the cosigner from the loan. This is not typical, but it can happen in certain situations. Read your loan agreement carefully to determine if this is an option.Sell The Car.You can also simply sell the car and get a fresh start. This is a good option if the arrangement doesn’t seem to be going well and you have not been able to improve your credit enough to refinance the loan in your own name.Refinance Your Loan.The best way to remove a cosigner is to refinance your loan. When you refinance you are starting over with a new loan, so your new lender will pay off your old lender. If you have worked to improve your credit, you may be able to find a car loan with a good interest rate and repayment plan. Working with a company that specializes in refinancing can help you navigate these waters.How Can I Add A Cosigner or Co-Borrower?The easiest way to add either a cosigner or co-borrower to an existing loan is, similarly, by refinancing. You can really only add someone to a loan at the beginning of the loan, so either applying with them in the first place or applying together to refinance is the best—and often only—option.That’s Everything You Need To Know About Cosigning And Co-Borrowing.Both cosigning and co-borrowing are very serious financial relationships, although they differ on the details. Both relationships should be taken seriously and a lot of thought should be put into the decision to cosign to co-borrower before any paperwork is signed.Refinancing your loan is a great way to either add or remove a cosigner or co-borrower. If you are looking to make a change on your car loan, get in touch with Auto Approve today.Get a quote on your refinance in 60 seconds.

Can you refinance an electric vehicle? The short answer is yes. The refinance process is the same regardless of whether your vehicle is electric, gas-powered, or hybrid. However, because of the recent changes in EV credits, electric car owners may have a harder time finding a good deal when buying out a lease or refinancing right now. Read on to learn more about refinancing and unique considerations for EV owners. Financing for Electric Vehicles: The 2026 Complete GuideIn this guide, you’ll find answers to some of the most common questions about refinancing and lease buyouts for EVs.We’ll cover:The EV refinance processWhat you need to refinance an electric carHow changing EV credits could affect your financingLeased EVsThe first step if you’re considering a lease buyout or refinanceThe EV refinance processLike any other vehicle, the process to refinance an EV is fairly simple. You’ll need to:Collect all your information.Research and get quotes from multiple lenders to compare options.Choose the loan with the best terms for your financial situation and apply.Sign the paperwork and switch to the new loan.Let’s take a closer look.1. Collect all your information.Gather information about your vehicle, your current loan, and your finances. Take a moment to consider whether the timing is right for a refinance: has your credit score gone up or down since you got your initial financing? Has it been at least six months since you got your loan, and do you have at least 2 years left on the loan? How have market and EV tax credit changes affected your loan-to-value?If you got your loan from a dealership, or if your financial picture has improved, there’s a good chance you could save between $135 and $500 a month by refinancing.2. Research and get quotes from multiple lenders to compare options.Our refinance experts recommend getting quotes from at least 3-5 lenders in your refinance search to ensure you find the best deal for you. Be sure to submit all your applications within a 2 week timeframe when you get to the part of the process that requires a hard credit check — this will minimize the hit to your credit caused by a credit check.If you choose to refinance with Auto Approve, you don’t need to worry about this: you’ll get quotes from our network of 50+ trusted lenders with only one hard credit check, then an Auto Approve loan expert will help talk you through the fine print of the options available to you to help you find the deal that’s right for you.3. Choose the loan with the best terms for your financial situation and apply.Read over your options—and review your existing loan terms—to check for your new APR, loan terms, monthly payment, and any fees. You’ll especially want to check your current loan for any prepayment penalties that might outweigh your potential savings.4. Sign the paperwork and switch to the new loan.Simple as that! Once you’ve found your ideal loan option, you’ll submit any required paperwork (including to the DMV, if necessary), and once everything is locked in, your new lender will pay off your old loan and you’ll start paying the new one. Be sure that everything is settled with the old loan before you stop making payments to be safe.Again, if you refinance with Auto Approve’s lender network, we’ll handle the paperwork for you—even the DMV.What you need to refinance an electric carHere’s your refinance paperwork checklist:Driver's licenseSSNProof of addressProof of incomeCar detailsProof of insuranceVehicle registrationCurrent loan informationNeed more details? Check out our guide to the paperwork you need to refinance.How changing EV credits could affect your financingHere’s the good news: if you purchased an electric vehicle and got financing before Sept. 30, 2025, you should have already benefited from the recently canceled federal tax credit. Plus, while the EV tax credit went away, starting January 1, 2025, a credit kicked in allowing qualifying individuals to deduct as much as $10,000 per year in interest on new personal use vehicles.The bad news is, it’s likely we’ll see a slightly accelerated dip in the resale value of electric vehicles in the next few years due to the now-expired credit, and if that results in your vehicle’s value depreciating faster than what would have been estimated at the time you got your original financing, your loan-to-value on your EV could get wonky, which could affect your eligibility for a better rate.Confused? The loan-to-value on a financed car, often abbreviated as LTV, is the percentage of your car’s value that you owe on an existing loan. You can read more about what it means, why it matters, and how to improve your loan-to-value here.Leased EVsIf your EV is leased and you’re considering a lease buyout, the drop in resale value for electric vehicles may be of greater interest to you. When you come to the end of your lease, you’ll likely have the option to either return the vehicle or buy it at a price set at the time you got your lease. If that price is higher than the market value of the car, it simply isn’t a great financial choice unless you really love that specific vehicle—or know that you’ll get dinged at turn-in time for issues with the condition of the car.The first step if you’re considering a lease buyout or refinanceThe first thing you want to do is gather intel: make sure your finances are in order and check the current market value of your vehicle. Then, reach out to Auto Approve to make the process smooth and simple, with no mark-ups on your rate.And that’s everything you need to know about refinancing or leasing an EV in 2026.In short: financing or leasing an electric vehicle today isn’t all that different from a standard gas-powered vehicle, with the exception that you’ll have to pay attention to how state and federal credit changes might shift your vehicle’s market value and how many similar vehicles are up for sale.If you’re ready to get started with your refinance, the experts here at Auto Approve have helped over 180,000 drivers get a better rate. Let us help you find your best deal today.Get a free quote now.

Here’s the short answer: that depends! Auto Approve customers typically save between $135 and $500 per month.Factors that determines how much you can save by refinancing include: Your current loan rate The loan-to-value on your vehicle Whether your financial picture has changed since you got your initial financing Whether you want to add or remove a co-borrowerHow market interest rates and your vehicle’s value have shifted since you financedWhere you got your initial financing (for example, dealership financing contains markups that make you more likely to save by refinancing)Want to know more? Read on.Here’s Your Guide To How Much Money You Can Save By Refinancing Your Car LoanWhen you refinance your car loan, you essentially restart your car loan with new terms and a new car loan rate. And this can translate to a lot of money in savings. But just how much can auto refinancing save you, and how do you decide the time is right?In this guide, we’ll cover:How refinancing a car loan can help you save moneyWhat you need in order to refinanceHow to know when the time is right to refinance, if you want to save moneyHow Does Refinancing A Car Loan Save You Money?Here are three key ways you might save money through refinancing:By lowering your annual percentage rate (APR)By lowering your total interest paid by shortening your loan term orBy lowering your monthly payment by lengthening your loan termWe’ll explain.Refinancing To A Lower Car Loan APR Saves You MoneyThe most common way to save money by refinancing your car loan is to secure a lower car loan APR. You may qualify for a lower car loan APR if any of the following apply to you:The market rates have decreased since you initially financed your car.Your credit score has improved since you initially financed your car.Your debt-to-income ratio has improved since you initially financed your car.You are adding a cosigner to your car loan who has a good credit score.Your original loan contained dealership markups.Your credit score is the biggest factor that lenders consider when they are determining what car loan APR to offer you. Credit scores are designed to tell lenders how much of a credit risk you are. The higher your credit score is, the more likely you are to repay your loan (at least in the eye of the lender). So while you do not have control over the market rates, you do have control over your personal finances and your credit score. Your credit score is determined by looking at the following categories of your finances:Payment history (35%)Amounts owed (30%)Length of credit history (15%)Credit mix (10%)New credit (10%)Your payment history and accounts owed are the two most influential sections of your credit score. Therefore paying attention to these categories will help you increase your score the most. If you are interested in refinancing, it is a good idea to ensure your credit score is in top shape before applying for refinance. Commit to making full, consistent, on time payments to all of your lenders, pay off accounts with a high credit utilization ratio, request higher limits on your accounts, avoid opening new lines of credit, and review your credit report for any errors. All of these steps can help improve your score, which will lead to a better car loan APR when refinancing a car.But just how much money can you save by lowering your APR with an auto refinance? Let’s look at an example. You initially financed $25,000 with an 8% car loan APR to be repaid over 5 years. Your monthly payments are $506.91. Over the course of five years you will pay $5,414.59 in interest alone. But let’s say you improve your credit score and you are able to refinance your car loan to 5%. Now your monthly payments are $471.78 and you will pay a total of $3,306.85 over the life of your loan. That’s over $2,000 in total savings. Refinancing To A Shorter Repayment Period Saves You MoneyWhen you refinance your car loan, you can change the repayment period. You can either lengthen the repayment period or shorten it, depending on your financial needs. If you want to save money in the long run, shortening your repayment period will mean that you will pay less in total interest over the life of the loan, but your monthly payments will ultimately be higher.Let’s look at the same example from above. You initially financed $25,000 with an 8% car loan APR to be repaid over 5 years. Your monthly payments are $506.91. Over the course of five years you will pay $5,414.59 in interest alone. But if you were to refinance to a loan period of 4 years instead of five years, your monthly payments would rise to $610.32. With one less year of interest payments, you would only pay $4,295.51 in interest. That’s a savings of over $1100, even if you don’t qualify for a lower car loan APR, if you have the income to cover a higher payment. If you qualify for a lower car loan APR on top of that (and many do!), the savings add up even more.Refinancing To A Longer Repayment Period Saves You Money On Monthly PaymentsIf you are having trouble making your car payments every month, lengthening your repayment period can significantly reduce your monthly payments and give you a lot more breathing room every month. Let’s consider the above example in reverse. If you initially had a $20,000 loan with 8% APR over 48 months and refinanced to 60 months, your monthly payments would reduce by over $100. While you would end up paying more in the long run, you would give yourself a lot of breathing room every month. By making your payments more manageable, you would give yourself more money to pay other bills and pay down other debts, which can ultimately improve your credit score.What Do I Need To Refinance My Car Loan?Refinancing your car loan is easy and doesn’t require too much. The first step is to see if you qualify for a car loan refinancing. Requirements will vary from lender to lender, and eligibility typically depends on:How old your car isHow many miles your car has on itHow much money is left on your loan There may be other factors at play, but generally the older your car is and the less it is worth, the harder it will be to refinance your car loan. If your car is ten years or older or has over 100,000 miles you may not be able to refinance. Also, if you do not have a lot of time left on your loan, lenders might not feel it is worthwhile for them to refinance your loan. Auto Approve can help you determine whether or not you are eligible for refinancing. If you are eligible, you want to shop around with different lenders and compare before applying. You won’t have specific terms and rates to compare, but you can look at customer satisfaction ratings and reviews to get a sense of what each company is like. You can refinance a car loan with a traditional bank, a credit union, or an online lender. You will want to apply to 3-5 lenders so that you can compare and get the best terms. The following documents are typically required when you refinance a vehicle.A Photo ID, such as a passport or driver’s license.Your vehicle’s information, which may include the bill of sale, VIN number, make, model, and year of your car.Proof of income and financial history, which may include pay stubs, banking information, and your credit report.  Proof of residence, such as a mortgage statement, lease agreement, or utility bill. Note that PO boxes are not acceptable as proof of residence.Proof of insurance.Worth noting:Be sure to apply to all of them in a fourteen day window so that they all count as one hit on your credit report! When you use Auto Approve to find your refinance, we handle gathering quotes for you, connecting you with a network of over 50 trusted lenders and a refinance expert to guide you.When Should You Refinance A Car Loan To Get The Most Benefit?So, how do you know if the time is right to refinance your car loan? While you can refinance your car loan at any time, it is more beneficial to do so at certain times. The time is likely right to refinance if:Your credit score has increasedMarket rates have decreasedYour debt to income ratio has improvedYou have had your existing loan for at least six monthsYou have more than two years left on your existing loanYou want to add or remove a cosignerIf some (or all) of these conditions apply to you, the time might be right to refinance. You can refinance before six months, but waiting six months to a year will give your credit score a chance to rebound from your last financing inquiry. It will also give you a chance to establish a good payment history, both of which will help you secure a better car loan APR. New lenders will appreciate seeing your on time payments to your existing car loan.The time might not be right to refinance a car if:Your credit score has decreasedMarket rates have increased significantlyYour debt to income ratio has gotten worseYour loan is brand newYour loan period is almost over.And That’s How—And How Much!—You Can Save By Refinancing Your Car Loan.If you’ve been asking yourself “why do people refinance auto loans?,” the answer is simple—it can save you a lot of money! Want to know whether you qualify? Get started with Auto Approve today to see just how much money you could be saving.Get a quote in 60 seconds.

Here’s the short version: A credit score is a number assigned to a person that indicates to lenders their capacity to repay a loan. The number is between 300–850 and indicates a consumer's creditworthiness. The higher the score, the more likely a person is deemed to pay back their loan. Credit scores are determined based on factors like how much you owe, how often you’ve made on-time payments, the kind of credit you have (like student loans, credit cards, a mortgage, a car loan, and so on), and how long you’ve had it.Read on for a more detailed look at credit scores, how they’re determined, and how you can change yours. After all, whether you want to buy a house or refinance a car loan, your credit score matters.Credit Scores: Your Complete GuideCredit scores can feel a bit mysterious. How are they calculated? Why do they seem to randomly increase or decrease?Today, we're talking all about FICO scores. Here’s what you’ll learn in this guide:What FICO meansHow credit scores are calculatedWhat causes a credit score to changeWhy good credit is importantHow to increase your scoreIn short, here are all the answers to the most common questions about credit scores.What Does FICO Mean?FICOⓇ stands for the Fair Isaac Corporation (originally Fair, Isaac and Company). Founded in 1956, the company came up with a now-ubiquitous system of scoring consumers to determine their credit worthiness, the FICO score.How Are Credit Scores Calculated?Credit scores are calculated based on 5 different categories. Payment history (35%)Amounts owed (30%)Length of credit history (15%)Credit mix (10%)New credit (10%)All of these categories contribute to your credit score, but some have a lot more weight than others.Payment HistoryDo you pay your accounts on time? Do you miss payments? How many days past due are your bills? These are factors in your payment history score. If your payments are over 30 days late, your lenders will typically report it to the credit bureaus. You want to have a high proportion of on-time, full payments to make your payment history score high. Amounts OwedThe amounts owed category is a mix of how much money you owe, how much money you have available to you, and the number and types of accounts you have. An incredibly important factor in this is your credit utilization ratio, which is a ratio of how much money you owe compared to how much money you have available to you. This ratio should be less than 30%.Length Of Credit HistoryThis category looks at how long you have had open and active accounts. How long have your credit accounts been established? How long has it been since you used certain accounts? The longer you have a history of having open accounts and consistently paying them, the higher your score will be.Credit MixYour credit mix looks at how diverse your accounts are. Healthy credit mixes can include installment loans, mortgages, car loans, credit cards and retail cards. Having a good mix will give you a better score.New CreditThis category looks at how many new accounts you have. If you have a short credit history with many new accounts, this will count against you. What Causes A Credit Score To Change?There are three credit bureaus that calculate credit scores: Experian, TransUnion or Equifax. Creditors typically send updates to these credit bureaus monthly. There are many things that can cause a credit score to change. A missed or late payment, paying off a debt, or closing an account are just a few things that can change your score. But sometimes it feels like you really haven’t done anything different and your score has fluctuated. No missed payments, no closed accounts. Well, the reality is that your score is always fluctuating. This is because if you are consistently paying your bills and consistently using your credit, things are going to shift one way or the other.Here are some of the most common reasons your credit score will fluctuate.You reduced your overall debt. If you have paid down some of your accounts, such as your mortgage or car loan, it reduces your overall debt. This will increase your score even though you haven’t necessarily done anything (besides paying your bills regularly).You reduced your borrowing limit. If you go for a long period of time without using one of your lines of credit, it could trigger the account credit limit to be lowered. This will increase your credit utilization ratio, which will have a negative effect on your score.You paid off a loan. Wait, isn’t that a good thing? Well yes and no. It’s great to have one less bill every month and one less headache, but when the loan is paid off, it affects many parts of your credit score. It will cause your credit mix to change, your overall debt to reduce, and your borrowing limit to reduce. Also, if you paid your account on time it will no longer factor into your score as heavily. Time has passed. Time simply passing will cause your score to change. If you are not keeping your accounts active, it will count against you. A negative event expired. If your house was foreclosed on or you had to declare bankruptcy, this appears on your credit report. And it stays for anywhere between 7 and 10 years, depending on the event. As time goes on, their impact is reduced, and eventually they will be wiped from your report.Identity theft. If there is a big swing in your credit report, it's possible that someone is using your credit to open unauthorized accounts. If you suspect this, request a copy of your credit report immediately and talk to the credit bureau.Why Is Good Credit Important?So we know how credit scores are calculated, but why are they so important? In short: having a good credit score indicates to lenders that you are creditworthy and will pay back your debts. Having a good credit score can help with the following:Lenders will approve you for lower interest rates on credit cards and loansLenders will be more likely to approve youLenders will give you higher credit limitsInsurance companies will give you better insurance ratesLandlords will approve you for rentals more easily You will have more negotiating power for loans and accountsHow Can I Increase My Credit Score?Make on-time paymentsRequest higher limitsPay down debtCheck your reportConsider refinancing If you want to increase your credit score, there are a number of things you can do in the long term and the short term. Make On-Time PaymentsMaking consistent on time payments is the most effective way to increase your credit score. Remember, payment history makes up for 35% of our credit score, so this category is extra important as it carries the most weight. Try to set up for autopay if possible to ensure that you don’t miss a payment.Request Higher Credit LimitsOftentimes, credit cards will raise your limits automatically throughout the years. But it doesn’t hurt to ask for your limit to be raised. Raising your credit limit will raise your available credit and reduce your credit utilization score. This can score you some extra points on your score, as this part of your credit score accounts for 30% of your total score.Pay Down Debt StrategicallyYour credit utilization ratio looks at your overall debt compared to available credit, as well as your debt to available credit for each account. So if you have one account in particular that has a higher ratio, prioritize paying down that debt first.For example, say you have two credit cards. One has a limit of $20,000 and a balance of $5,000. The credit utilization ratio for this account is 25%. The other credit card has a limit of $10,000 and a balance of $3,500. The credit utilization ratio for this account is 35%. You should prioritize paying down the debt on the second card to reduce that credit utilization ratio.Check Your Credit Report And Dispute ErrorsYou should get in the habit of requesting your credit report three times per year. It is free to do so once per year from each of the three credit bureaus. When you get your report, look over everything carefully. Cross check your payment records and credit limits and make sure nothing is misreported. This will also help you catch any fraudulent activity that may be brewing.If you notice any issues or irregularities, report them to the credit bureaus immediately. They have 30 days to investigate and respond, so the sooner you report any issues, the better.Refinance Your Car LoanYou are probably wondering, “Wait, does refinancing affect your credit score?” – and the answer is yes. In fact, a great way to improve your credit score is to refinance your car loan. It will not instantly raise your credit score (on the contrary, the hard inquiry on your account will temporarily ding your score). But refinancing your car loan can help you out in the long run. Refinancing your car loan when market rates are low will help you secure a lower car loan APR. And this can save you lots of money every month, not to mention overall. It will ultimately free up more money every month so that you can pay off other debts and ensure that other payments will not be late. And That’s Everything You Need To Know About Credit ScoresPut in the time and effort to make sure you have a good credit score. It will pay off tenfold in the long run. If you have a good credit score but want to bump it up to the next level, consider refinancing your car with Auto Approve. We can help you save loads of money every month, and who couldn’t use some extra cash?GET A QUOTE IN 60 SECONDS

Here’s the quick version: Understeer and oversteer are terms used to describe how a moving vehicle takes turns.Understeer is when the vehicle doesn’t turn as much as it needs to or feels like it should—you have to turn the steering wheel more than you’d expect.Oversteer is when a vehicle turns more than you want it to—it seems extra sensitive to steering.Read on for the longer answer and an explanation of how oversteering and understeering happen, and how it might affect your choice of vehicle when buying a new or used car.Oversteer vs. Understeer: Your Complete GuideIn this article, you’ll find answers to the following FAQs and common concerns about oversteer and understeer:What are oversteer and understeer?What causes a vehicle to understeer?What causes you to oversteer?Which is better, oversteer or understeer?Which vehicles are more likely to over or understeer?What that means for your choice of vehicle when buying a carHere’s what you need to know.What are oversteer and understeer?Oversteer and understeer are terms used to describe a vehicle’s response to steering and sensitivity to changes in steering angle when combined with acceleration. Basically, they describe what happens when something doesn’t go quite right when you’re turning.What causes a vehicle to understeer?Understeer happens when your vehicle loses traction on its front wheels and doesn’t turn as much as you expect it to. It looks like going straight when you want to turn, or taking an extra wide turn. As an example, understeering might happen if you start accelerating too early while turning, in which case you’d need to gently slow your acceleration.What causes a vehicle to oversteer?Oversteer happens when you lose traction on the back wheels of your vehicle and it turns too much, with the back of the vehicle swinging out further than you might want it to. It looks like turning more than necessary, or “drifting.” For example, you might end up oversteering if you take a turn too fast or brake sharply, in which case, you’d need to steer against the slide—similar to what you’d do if you found yourself sliding on ice or hydroplaning.Which is better, oversteer or understeer?That’s contextual! Oversteer is sometimes considered better for performance driving, like racing, because it allows the vehicle to make sharper turns and more easily accelerate out of a turn. However, for general driving on public roads, understeer is preferred, because it’s safer than spinning out on the road. If you panic while understeering, you’ll likely go straight forward, meaning any collisions are typically taken by the front of the car, which is designed to take more impact. Which vehicles are more likely to over or understeer?Oversteering and understeering are caused by how weight is distributed in a vehicle and tire condition.Rear wheel drive vehicles, like sports cars, are more likely to oversteer, while front wheel drive vehicles, like most common sedans and hatchbacks, are more likely to understeer. AWD and 4WD vehicles vary, with some modern models built to mitigate either effect, but they generally tend toward understeering too. Smooth driving, especially when turning, and making sure you have the right tires for your roads (kept in good shape!) are the best way to avoid under or oversteering.Thinking about oversteer and understeer when buying a carIf you’re worried about having a vehicle that’s prone to understeering or oversteering, here’s what you need to know.Understeer is generally safer, so you probably don’t want a sports car or other rear wheel drive vehicle if you’re concerned.Choosing the right tires is as important as the make and model of your chosen vehicle.Driving safely and smoothly is a good way to generally avoid either effect under most circumstances, especially if you have well-maintained, weather-appropriate tires.Keeping your vehicle well-maintained so you know if anything isn’t quite right can also help and is always a good idea.You can look into any specific models you’re considering buying before signing to find out if they have a known tendency to over or understeer.Bonus tip: If you’re thinking about buying a vehicle, read our guide to dealership markups and negotiate to get a better rate.And that’s everything you need to know about understeer versus oversteer.Use this quick and handy guide to stay a little safer on the road and understand the mechanics of what happens when a vehicle understeers or oversteers.Paying too much on your vehicle loan?We’re Auto Approve, by the way. Auto Approve is your auto loan refinance partner, helping you find the best rate available to you and handling the paperwork to make lowering your monthly car payment quick and easy. Whether you’re thinking about a new vehicle or locked into a loan, when you’re ready to refinance, Auto Approve can help.Get your free, no-commitment quote right now.

Here’s the quick version of what you need to know. People typically get rejected when they apply for a vehicle loan for one of a few key reasons: Bad credit Too little credit Other financial issues, like a high debt-to-income ratio Application issues, like a typo in your social security number or missing backup documentation to prove your income (unverifiable income) If you’ve recently been rejected for an auto loan and aren’t sure why, you should receive or have received a letter, called an Adverse Action Notice, which details why you were rejected. While the reason may be unsatisfactory, it’s also the best guide you’ll get for how to avoid rejections in future.Vehicle Loan Application Denials: Your GuideIf you have ever applied for a car loan or auto refinance only to be rejected, you may feel disheartened (and maybe even a little bit confused). But all is not lost! Understanding why you were turned down can help you get approved in the future, and correcting any problems can even help you get a better car loan APR (annual percentage rate) than you’d otherwise have qualified for.In this guide, we’ll answer the follow frequently asked questions about car loan rejections:Why was I denied a car loan?What happens if you are denied a car loan?What should I do if I am denied or want to avoid a denied loan?Read on to learn more about why someone might get rejected for a car loan (and what you can do to avoid a rejection or make sure it doesn’t happen again).Why Was I Denied A Car Loan?Getting denied a car loan is not uncommon. There are quite a few reasons why it may happen to you, and there are always ways to fix your situation to ensure that you can get approved for a car loan in the future.Take a closer look at the 4 most common reasons for a car loan denial:Poor credit Application errorsDebtToo little credit Your Credit Score Is Poor.A poor credit score is the most common reason to be denied a car loan. Credit scores are broken down into the following categories:Exceptional (Super Prime): 800-850Very good (Prime): 740-799Good (Near Prime): 670-739Fair (Subprime): 580-669Very poor (Deep Subprime): 300-579 If your credit score is fair or very poor, you will most likely have a very difficult time getting approved for a car loan. A score of at least 620 is recommended to get approved for a car loan. The better your score is, the better the car loan APR you will be offered. There are auto lenders for people with poor credit scores, but they have high interest rates and tend to have more penalties and fees associated with them. There Were Errors In Your Application.It’s also relatively common to be denied for a car loan due to a simple error in your application. If you forgot to fill out a section or mistakenly answered a question, you may be denied a car loan. If your denial letter lists something that seems unfamiliar, you may want to take some time to double check that your application was accurate and complete.You Have A Large Amount Of Debt.If you have a high debt-to-income ratio, you may be denied a car loan. Lenders look not just at your income and credit score, but at the totality of what you owe, including mortgages, student loans, credit card debt, and more. If the amount you owe is relatively high when compared to how much income you bring in, lenders may see you as a risky applicant.You Don’t Have A Long Credit History.If you do not have a long credit history, lenders may be reluctant to loan you money for a car. There simply isn’t enough information to determine whether or not you are a good candidate for a loan.What Happens If You Are Denied A Car Loan?The good news is that getting denied a car loan doesn’t automatically hurt you (besides meaning that you do not have the new car you want). But if you are rejected for multiple loans that all pull hard inquiries on your credit report, that may lower your credit score slightly. Lenders are required to tell you why you were rejected for the loan. If they do not state the reason in the initial response, reach out and inquire. They have 60 days to respond (if they do not respond, they will be in breach of the Equal Credit Opportunity Act).It may take some work, but in most cases you can fix whatever caused you to be rejected in the first place.What Should I Do If I Am Denied, Or Want To Avoid A Denied Car Loan?If you are denied a car loan, there are several steps you can take to ensure you get approved the next time around. If you haven’t applied yet, but are worried about any of these factors, the remedies are the same.If You Were Denied Due To A Poor Credit Score.If you were denied a car loan because you have a poor credit score, you can work to improve your credit score for the next time you apply. Your credit score is based on five different categories:Your payment history (35%): Are your payments on time and in full? Your amounts owed (30%): How much debt are you in and how does that compare to the amount of credit you have available to you? The length of credit history (15%): How long have you had your accounts open?Your credit mix (10%): Do you have a healthy mix of accounts (such as a mortgage, credit card accounts, student loans, etc)?  Your new credit (10%): Do you have new accounts where you haven’t proven your ability to repay?There are many factors that go into your credit score, so taking the time to review your credit report will give you a good sense of what areas you can improve in. Improving your credit payment history is the most effective thing you can do to increase your score, as it has the largest weight for your credit score. You can improve this category by committing to making full and on-time payments to all of your accounts. Signing up for autopay is one great way to ensure you don’t miss a payment. But, if you’re already making on-time payments, there are lots of other steps you can take to improve your credit score and give you a better chance at getting approved for a car loan:Review your credit report for errors or mistakes.Request higher credit limits on your accounts. This will decrease your credit utilization ratio and improve your score.Pay down accounts that have high credit utilization ratios (the ratio of debt you are in compared to available credit).Catch up on any past due accounts. Consider contacting a credit counselor if this feels too overwhelming. They can design a debt repayment plan that will work for your budget.Limit applying for new accounts. These can trigger hard inquiries which can lower your score.Building your credit score takes time, but it is definitely worth it. Having a good credit score will help you get approved for loans, get better interest rates, and help you get better insurance rates.You Were Denied Because Of An Error In Your Application.Most of the time you can simply apply again, but be sure to double check that everything is correct the second time around. A common reason for this is something called unverifiable income – this means you need to provide more evidence of your income, like tax returns, recent pay stubs, or bank statements showing recurring deposits. Basically, you need to provide more paperwork.Pro Tip: If you’re applying to refinance, you can work with one of Auto Approve’s refinance experts and they’ll do the paperwork for you to avoid errors in future!You Were Denied Because You Have A Large Amount Of Debt.If you have a large amount of debt you should definitely prioritize paying some off before you put yourself in even more debt. There are several ways to achieve this depending on your circumstances.You can use the avalanche method, which involves paying off your debts by order of interest rates. By paying off your highest interest rate debts first, you will help save yourself further costs in interest. This is one of the most popular (and quickest) ways to pay off debt.You can use the snowball method, which involves paying off your debts by size, starting with the smallest amount first. This is great for your morale and can keep you motivated to pay off your debts.But whatever method you use should start with a solid budget. Creating a budget is the best way to organize your finances and can help show you where you can cut costs and save money. Contacting a debt consolidation service can also help you to get organized and keep on top of your payments.You Were Denied Because You Don’t Have A Long Credit History.This is a tricky one. There is no quick fix to getting approved if you do not have a long credit history. It can take you several years to build up your credit score. Getting a credit builder loan is a great step to take when getting started. Credit builder loans deposit money in a savings account, and once you pay off the balance the money is released to you. Your payments get reported to the credit bureaus and can give your credit score a good raise so long as you make full payments.Secured cards are another way to help build credit. These cards require you to deposit money in order to open an account. This is referred to as your security deposit. Paying the minimums on these accounts can help you establish credit.You can also consider applying for a car loan with a co-signer or co-borrower. When you apply with a co-signer, lenders take both of your credit histories into account. If your co-signer has a good score, you will have a much better chance of being approved for a loan. Additionally, making payments on your new car loan will help you build credit. A co-signed loan is in your name and you are responsible for payments, but your co-signer will be responsible if you default.You can also apply for a joint loan, where you and your counterpart will share equal responsibility for the loan (a co-borrower). Lenders will again consider both of your credit scores and histories when determining eligibility. Making payments will help you to build your credit, and you can finally get the car you’ve been wanting.While Getting Rejected For A Car Loan Can Be Disheartening, There Are Ways To Make Sure It Doesn’t Happen Again.Take steps like:Checking your credit report for issues and errorsChecking your application for errors or adding more documentation to support your listed incomeWorking to improve your credit scoreWorking to build your credit historyPaying down debts or asking to raise your credit limit to improve your debt-to-income ratio and credit utilization rateBringing on a co-borrower or co-signerOffering a bigger downpayment so you’re applying for a smaller loanAnd if you already have a car loan and are looking to refinance, Auto Approve can help! Get your free quote today to find out how much you could be saving.GET A QUOTE IN 60 SECONDS

You might be wondering: Does refinancing hurt your credit? Here’s the short answer: Auto refinancing will cause a slight temporary dip in your credit score when your credit is checked and you take out a new loan. However, refinancing can help you get a lower rate and/or lower your monthly payments, so it’s still worthwhile for many drivers—and can actually help your credit in the long run.Read on for a more in-depth look at refinancing, credit scores, and how and why refinancing can impact your score.How Auto Refinancing Can Affect Your Credit Score: The Complete GuideIf you’re thinking about refinancing your auto loan, it’s only natural to want to know what will happen to your credit score. After all, credit scores can seem confusing and complicated, and maintaining a good score can be crucial for many major life events.So, it’s important to understand how this financial move will affect your overall financial picture before deciding whether or not a refinance is right for you.In this guide to how refinancing can affect credit scores, we’ll discuss the following frequently asked questions about car loan refinancing and your credit score:What is auto refinancing?How are credit scores calculated?What is considered a good credit score?How will vehicle refinancing affect my credit score?How do you reduce the impact of refinancing on your credit score?Is refinancing worth it?What Is Auto Refinancing?Auto refinancing is when you pay off your existing car loan with a new car loan. Your new loan will ideally have more favorable terms that will ultimately save you money.To understand how vehicle refinancing will affect your credit, we will need to look at how credit scores are calculated.How Are Credit Scores Calculated?Credit scores are used to help lenders assess how likely you are to pay back your debts.Credit agencies typically look at five factors to determine your credit score:Payment historyAmounts owedCredit history lengthCredit mixNew creditHere’s a closer look.Payment HistoryThis is the most important factor in calculating your credit score, accounting for 35% of your FICO score. Do you have a history of on time payments? Lenders want to be sure you will pay back your debt on time.Amounts OwedThe amount of money you owe, your debts, are used to calculate your credit utilization score. This is the second most important factor in your credit score. This is calculated by dividing your total debt by your total credit limit. For example:Let's say, between all of your outstanding accounts, you currently owe $5,000. Your combined credit limit for all of these accounts is $50,000. 5,000 ÷ 50,000 = .1 = 10% Credit UtilizationA credit utilization score below 30% is considered desirable for lenders. This score accounts for 30% of your FICO score.Credit History LengthThe age of your credit accounts make up 15% of your FICO score. They look at the age of your oldest account, the age of your newest account, and the average age of all accounts. Having older accounts and a longer credit history is more favorable to lenders.Credit MixHaving a diverse assortment of accounts is beneficial to a high credit score. A healthy mix might include a mortgage, auto loan, student loan, and credit cards. This indicates to lenders that you can manage your money across multiple accounts. A healthy credit mix accounts for 10% of your credit score.New CreditThe number of new accounts you have opened plus the amount of hard inquiries you have had on your credit account for 10% of your credit score. People often ask, “how long do hard inquiries stay on your credit?”. The answer is about one year. If you have had a significant amount of inquiries in this time period, it might be a red flag for lenders.What Is Considered A Good Credit Score?Credit scores typically range from 350 to 850. 800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor creditPeople with the highest credit scores will more easily be approved for loans and credit applications, and will typically get the best interest rates and annual percentage rates (APRs). Using the above factors, credit bureaus calculate a credit score for every person with a credit history.How Will Vehicle Refinancing Affect My Credit Score?The short answer: Refinancing will cause a temporary dip in your credit score, but may help raise your credit score long term.The long answer: Here are the factors that determine how refinancing a vehicle will affect your credit score.Lower credit score (now):Hard credit checkCredit history lengthNew creditRaise credit score (later):Payment historyCredit mixAmounts owedHere’s the details.Refinancing will affect categories used to calculate your credit score: credit history length and new credit. Having a new account will negatively affect your credit history length, and the hard inquiries and new account will also affect the new credit category.However, it is important to note that hard inquiries only last a year on your credit score, so that will only be a temporary ding. Credit bureaus know that people contact multiple lenders when looking to open an account, so they allow a two week timeframe where all inquiries will count as one hard inquiry. In other words, don’t let fear of lowering your credit score hold you back from shopping around for the best rates.And, in the long term, having the loan that makes sense for you will make you more likely to make on-time payments, and once the credit checks are gone and the loan is no longer considered new credit, you’ll have a good mix of credit and build your credit history.How Do You Reduce The Impact of Refinancing On Your Credit Score?To reduce the impact that vehicle refinancing will have on your credit, be sure to:time your refinance to not come immediately before or after another hard credit check or new credit linedo research ahead so you know what you’re looking for and what will work for your budgetunderstand how credit scores are calculatedcomplete all of your applications in a short period of time (under two weeks) so that all hard inquiries will count as one inquiry in the allotted windowIs Refinancing Worth It?The short answer:Refinancing is worth it if:interest rates have gone downyour credit score has gone upyour budget is tightyou want to add or remove a co-borroweryour car is worth more that your loanThe long answer:This depends entirely on your situation, but it is often worthwhile to take a temporary hit on your credit score to improve your overall financial health. If you refinance and take a ding on your credit, the hard inquiry will only remain on your score for one year. The age of your accounts will also lengthen over time, so your credit history length will not be affected permanently. If refinancing makes it easier for you to keep up on your monthly payments, it may help your credit score in the long run.In short, should any of the following apply to you, it may be worth refinancing your vehicle:Interest Rates Are Going DownIf interest rates are trending downwards, it might be beneficial to refinance your car loan. Your overall savings will negate the temporary hit on your credit.Your Credit Score Has IncreasedIf your credit score has increased, you have a better chance of qualifying for a lower interest rate. Check your credit score at one or all of the three major credit agencies (Equifax, Experian, and TransUnion) and see how your current credit score compares to your score when you originally took out your auto loan.You Need Extra Cash Every MonthIf money is tight, refinancing might alleviate your monthly payments. If you are in danger of making late payments or defaulting on your loan, this will severely damage your credit score. It is far better to refinance and take a small hit than risk defaulting.You Need To Add Or Remove Someone As A Co-BorrowerIf you need to either remove or add a co-borrower to your loan, refinancing will allow you to do so.Your Car Is Retaining ValueIt is important that your car is retaining its value if you want to refinance. Owing more than the car is worth is called being “upside-down” in your loan. You will have a hard time finding a lender if this is your situation.Now You Know How Refinancing Your Auto Loan Will Affect Your CreditWhether or not it is worth it to refinance your car loan will depend on your situation, but the benefits of refinancing will often outweigh the dip that you might see on your credit score. If you are ready to start your refinance or want more guidance on whether or not a refinance is right for you and your unique financial position, Auto Approve can help.Get the ball rolling with a free, no-commitment quote to check your eligibility and see how much you can save, then work with one of our refinance experts to compare quotes and find the best deal for you.Get your free quote now. 

You’ve probably heard the term APR tossed around a lot. But what does APR stand for, and what is the difference between interest rate and APR? While these terms are similar, they are not exactly the same. Here’s what you need to know:APR stands for annual percentage rate. Your APR is the total cost you pay per year for borrowing money in a loan. It includes your interest rate, but also any other fees and markups. That’s why it’s important to know your interest rate and your APR when you’re thinking about taking out a loan or refinancing. Your Complete Guide to Car Loan APRs (Annual Percentage Rates)In this guide, you’ll learn everything you need to know about interest rates, APRs, and how they are calculated.Table of ContentsThe difference between interest rate and APRHow to calculate APR on a loanHow car loan interest rates are determinedHow to get a lower APR on your car loanWhat Is The Difference Between Interest Rate And APR?Interest rate and APR are often used interchangeably in the car loan industry, but they are not exactly the same thing. An auto loan’s interest rate is the cost of borrowing money every year, expressed as a percentage. It does not include any fees that are charged for the loan. An auto loan’s APR (Annual Percentage Rate) is the cost of borrowing money every year, expressed as a percentage, including any associated fees.So while they are similar, they are not exactly the same. The APR is considered to be a more accurate measure of the cost of the loan, as it takes all of the fees into account as well. The Truth in Lending Act requires lenders to disclose all loan terms and fees, so they are obligated to alert you to anything that you are responsible for paying. Since all lenders must disclose the APR, it is a valuable tool for comparing loan terms.Note: Be sure that you are always comparing APR to APR, not APR to interest rate. You always want to compare apples to apples.Here’s How To Calculate APR On A Loan.A car loan APR is calculated using the interest rate that you are offered. Here are the basic steps to calculate APR on car loans.Determine the interest amountAdd any administrative fees to the interest amountDivide by the principalDivide by the number of days in the loan termMultiply by 365 (one year)Multiply by 100 to convert to a percentageIn other words, here is the APR formula: APR = ((Interest + Fees / Loan amount) / Number of days in loan term)) x 365 x 100Let’s put this to use. Math class is in session! For example, say you are borrowing $20,000 to finance your new car. You have a 5% interest rate and a four year loan period. The closing costs on your loan are $700. Principal (P) : $20,000 Interest Rate (R) : 5% Time (T) : 4 years The interest on the loan can be found with the formula: Total Amount Accrued = Principal (1+Rate x Time) Total Amount Accrued = 20,000 (1+.05 x 4) Total Amount Accrued = 20,000 (1.2) Total Amount Accrued = $24,000So now we know our total amount accrued is $24,000, and our accrued interest $4,000 (Total Amount- Principal Amount). Now we can put all of this in our APR formula. APR = ((Interest + Fees) / Loan amount) / Number of days in loan term)) x 365 x 100 APR= ((4000 + 700)/20000) / 1460 x 365 x100 APR = 5.875 %So while your interest rate is 5%, your APR is actually 5.875%. This number more accurately represents the actual annual cost of your car loan.How Are Car Loan Interest Rates Determined?While the car loan APR is what you should be comparing, this number is based on the interest rate that you are offered. But how are car loan interest rates determined? Why do these rates vary from person to person?Car loan interest rates are determined by:Market factorsYour creditYour incomeYour loan termMarket FactorsCar loan interest rates depend in part on how the economy is performing. Interest rates are set by the Federal Open Market Committee (FOMC). If the committee determines that spending needs to be encouraged, it will lower interest rates to do so. Conversely, if inflation is high, they might raise market interest rates to slow things down.Read our guide to how interest rates are determined for a more in-depth look at how this works and why it might be relevant to your financing or refinancing options.Your Credit Score And HistoryYour credit score is the most important factor in your car loan interest rate. Credit scores are the biggest variable from application to application. Your credit score takes into account the following categories: Payment History. Do you have a history of on time payments? Have you missed payments in the past? Lenders want to be sure you will pay back your debt on time. Amounts Owed. How much money do you owe? The amount of money you owe, your debts, are used to calculate your credit utilization rate. A credit utilization score below 30% is considered desirable for lenders. Credit History Length. How old are your accounts? Having older accounts and a longer credit history is more favorable to lenders. Credit Mix. Do you have a mix of different types of accounts and debts? A good mix might include a mortgage, auto loan, student loan, and credit cards. This indicates to lenders that you can manage your money across multiple accounts. New Credit. Do you have a lot of hard inquiries on your credit? Do you have some brand new debts? These might be considered liabilities by lenders.Your IncomeIn addition to your credit score, lenders will also look at your income and your debt-to-income ratio. If you are carrying too much debt, the lenders may only offer higher car loan interest rates as they consider you to be a riskier candidate.The Loan TermIn general, the longer the loan term is, the higher the interest rate you are offered will be. Lenders will offer lower rates for shorter terms. This means that if you select a longer lease period, you are not only paying a higher car loan interest rate, but you are paying it for a longer period of time. This means you will end up paying a lot more money overall by selecting a long repayment period. On the other hand, if money is tight, choosing a longer loan term can mean a lower monthly payment, which may be the right choice in certain circumstances (for example, if you need a car for work and can’t afford a higher payment), despite the downside of more interest paid over the life of the loan.How Can I Get A Lower APR Car Loan?If you are looking to secure a new car loan or refinance an existing loan, you’ll likely want to find the lowest APR car loan you’re eligible for. Here are a few actions you can take to increase your chance of securing a good car loan interest rate:Get your credit report and review for errorsRequest higher credit limitsKeep your credit balances below 30%Make on time paymentsShop around and compareStep 1. Get Your Credit Report And Review For ErrorsContact one of the major credit bureaus (Equifax, Experian, and TransUnion) to get a free copy of your credit report. You can get your report from each agency for free once per year. Review your report carefully and look for any inconsistencies. Are the dates of opened accounts correct? Are the balances on each account accurate? Is your payment history correct? Make sure that all credit limits are up to date and that all personal information is accurate. If you notice any errors, report them immediately. Step 2. Request Higher Credit LimitsThe higher your credit limits are, the lower your credit utilization ratio will be. This ratio looks at the amount of money you owe and the amount of money available to you. Lenders will often increase your limits throughout the years when they review your information, but you can also try requesting a higher limit. This will help your score as soon as it is reported to the credit agencies.Step 3. Keep Your Credit Balances Below 30%Keeping your balances to less than 30% of your available credit will help your credit score greatly. This will lower your credit utilization ratio, as discussed above. Those with the highest credit scores often use less than 7% of their available credit, so keep that in mind when you are looking at your accounts. Working to keep a low credit utilization ratio will help your score immensely, and with it your eligibility for a low APR. Step 4. Commit To On Time PaymentsMaking consistent, full, and on time payments will help your score a lot. Sign up for autopay if you are able to, or set an alert on your calendar if you have a tendency to miss payments.Step 5. Shop Around And CompareThe car loan interest rates that you are offered will vary greatly from lender to lender, so you really want to prioritize shopping around. Remember that you can and should negotiate on the interest rate and fees you’re offered, especially if you’re considered dealership financing.If you are looking to refinance, Auto Approve makes shopping around and comparing incredibly easy. We have relationships with 50+ trusted lenders all across the country and can easily help you apply and compare offers instantly. And That’s What You Need To Know About APRsNow that you know all about car loan interest rates and annual percentage rates, or APRs, you’re ready to go out and get your best loan or refinance—and if you’re refinancing, Auto Approve is here to help. If you’re ready to refinance an auto loan, get your free, no-commitment quote today.Get a quote now.

Here’s what you need to know. You should consider refinancing your loan if any of the following are true:your credit has improved and/or your finances have improved (for example, if you've lowered your debt-to-income ratio) market rates have droppedused car values have gone up you got your loan from a dealership or otherwise got a bad dealyou're having trouble making your monthly paymentsyou want to pay off your loan earlier than originally plannedyou want to add or drop a co-borrowerAnd you've had your loan at least 6 months and have at least 2 years left on your loan.If one or several of these conditions apply to you, you’re likely eligible for a beneficial refinance! Check your eligibility and get a quote before making any official applications that require a hard credit check, then shop around for your best offer. If your credit has dropped, market rates are high, or your loan is very new or very old, you may want to wait or avoid refinancing, unless you can no longer afford your car payments and need to consider taking a less beneficial loan in order to keep your car and maintain your credit. Refinancing is a simple way to lower your monthly car payment in a pinch.Read on for more details about when to refinance, when you should wait, and what you need to know about the refinancing process.When To Refinance An Auto Loan: Your Complete GuideIn this guide, we’ll take a closer look at the following common refinance questions:When should you refinance a car loan?What should you not refinance a car loan?How do you refinance a car loan?Refinancing a car is a bit of a game when it comes to timing. You get the most bang for your buck when the stars align, but if it’s not meant to be it can be a waste of time. So how do you know when the time is right to refinance, and when the time is not right?Let’s talk about when you should refinance your car and when you should wait.1. When Should You Refinance A Car Loan?Car loan refinancing has a lot of benefits, but the biggest benefit is that it can save you money. However, in order to save money, the timing must be right. Here are a few signs that you might benefit from car loan refinance:your credit score has improvedthe market rates have decreasedyou want to pay off your loan earlyyou are having trouble making your monthly paymentsYour Credit Score Has ImprovedYour credit score is the number one thing lenders look at when determining your eligibility for a car loan refinance. It will also help them to determine what interest rate you should be offered. Credit scores give lenders a good indication of how likely you are to repay a loan. A high credit score tells lenders that:You make on time paymentsYou are not in too much debt You can manage making payments across multiple varying accountsThe better your score is, the better the interest rate you are offered will be. If your credit score was so-so when you initially financed, the interest rate that you were offered might not be ideal. But if you have worked to improve your credit there is a good chance you will qualify for a better interest rate. There are many reasons why your credit score may have improved in the past few years:You made full and on time payments to your accountsYou paid off some debtYour debt to income ratio improved (either due to decreased debt or increased income)A negative event expired (such as a bankruptcy)You have a better mix of creditIf you are considering car loan refinance, it’s a good idea to get a copy of your credit report and look for any errors. Correcting any errors can improve your score a good deal. Reviewing your report can also give you an idea of what areas you can improve on. But if your score is higher than it was when you initially financed, refinancing might be worth it.The Market Rates Have DecreasedAnother way you can secure a lower interest rate on your car loan is if market rates have decreased since you initially financed your car. The car market has been all over the place in the past several years, so this will very much depend on when you actually financed.You Want To Pay Off Your Loan EarlySure, there are ways to pay off your loan early without refinancing. But if you do refinance your loan, you can save money while doing so. When you shorten your repayment period, lenders will often give you a lower interest rate which can save you a significant amount of money. If you couple this with a better credit score, it can mean a significantly lower interest rate. A shorter period also means you will be paying interest for less time, so you can save a lot of money in the long run.You Are Having Trouble Making Your Monthly Payments.Even if you might not necessarily qualify for a lower interest rate, refinancing might still be a good idea for your finances. When you refinance your loan, you can change your repayment period. If you are having trouble making monthly payments, lengthening your repayment period can spread out your repayment over more time and thus reduce your monthly payments a good deal (we are talking hundreds of dollars per month). While you will end up paying more over the life of the loan, this can still be a good move for you. Loosening up extra money every month can allow you to allocate that money to other payments, which may be important to you and help your overall financial health.2. When Should You Not Refinance A Car Loan?Just as there are times when refinancing your car is a great idea, there are also times when refinancing does not make sense. If any of the following apply to you, it might not be a good time to refinance:you have an older caryour loan is underwateryour loan is less than six months oldyour loan has less than two years left on ityou have a lot of prepayment penaltiesYou Have An Older CarIf your car is older or has a lot of miles on it, chances are you will have a hard time refinancing your loan. Cars that are ten years old (or older) or have more than 100,000 miles on them are less likely to be approved for refinancing. Your Loan Is UnderwaterIf your car loan is underwater, you will have a very hard time refinancing it. This means that you owe more on your car than your car is worth. A car loan can become underwater if you do not put a large enough down payment on your car initially and/or make minimum payments on your account. Certain types of cars have a higher rate of depreciation, so simply having a car with a high depreciation rate can mean your loan can end up underwater.Your Loan Is Less Than Six Months OldIf your loan is less than six months old it is a good idea to wait a little longer before you refinance. While there is no strict rule on how long you can wait to refinance your loan (you generally only need to wait as long as it takes for the paperwork to go through), experts recommend waiting at least six months to a year. This will give your credit score a chance to bounce back from the hard inquiry and give you a chance to establish that you are making consistent payments. This can lead to a better interest rate and better terms for your refinance. Your Loan Has Less Than Two Years Left On ItIf your loan has less than two years left on it you may have trouble getting approved, or it may simply not be worth it to you. Car loan payments are designed so that you pay the bulk of the interest upfront. The nearer you are to the end of your loan period, the less you will actually save on interest as your payments will primarily be going towards the principal (this is called an amortized loan). The earlier you refinance the more you will be able to save on interest payments.You Have A Lot Of Prepayment PenaltiesSome car loans come with hefty prepayment penalties. These fees might outweigh any benefits of refining, so do the math before you commit to moving forward.3. How Do I Refinance My Car Loan?Gather your informationResearch and applyCompare and signIf it seems like now is a good time to refinance your car loan, working with a company that specializes in refinancing is the best option for most people, like Auto Approve. Auto Approve makes the application process simple and quick, with a network of trusted lenders to help you find your best deal and refinance experts to help you decide which loan is the best for you. Step One: Gather Your InformationThe first step to refinancing is gathering all of your information. You will need the following information to get the process started:Current loan information. You will need the name of your current lender, your account number, and your payoff amount. It’s good to have the contract handy to compare specific terms as well. Personal information. You will need identification, proof of employment, proof of residence, and your contact information.Vehicle information. You will need your car’s VIN, make, model, year, and mileage.Step Two: Research And ApplyYou should aim to apply with 3-5 different lenders for your refinance. Read online reviews, ask friends and family, and determine which lenders might be a good match for you. Consider a mix of traditional banks, credit unions, and online lenders. When you narrow your list down you can apply. Or, apply through Auto Approve and you’ll have access to our network of 50+ trusted lenders to help you find the right deal and comparison shop quickly and easily.Step Three: Compare And SignWhen your offers come in, be sure to compare all of the terms. Look at the interest rates, the repayment period, the prepayment penalties, and all of the other terms. When you decide on a loan, you can simply sign and start saving. Your new lender will most likely handle paying off the old loan, but be sure to double check that this is done before stopping payments!Now You Know How To Determine If It’s A Good Time To Refinance Your Car Refinancing can help you to save a lot of money, but only if the time is right. If you use Auto Approve for your refinance, we’ll help you with the entire process. From selecting which lenders to apply with to determining the best fit for you, our experts are your advocate for the refinancing process. If you’re ready to get started, we can help you determine if you qualify and guide you through the refinance process. Get your free, no-commitment quote to find out if now is the right time for you!Get your quote now.

Here’s What You Need To Know. Ultimately, the best place to get a car loan will depend on your situation. Your options to get financing include: At the dealership From a traditional bank or credit union Through an online lender Typically, to get your best possible loan, you’ll want to shop around a little and get pre-approved before you go in to buy a vehicle. Dealership financing is likely to include some pretty substantial markups, so don’t be afraid to negotiate not just on the terms and car price but on the APR and fees attached to your loan. Getting pre-approved can make that negotiation easier, even if you know you’d prefer dealership financing.Already got a loan through a dealership? Millions of Americans with dealership financing are eligible for lower rates and better terms than the ones they’re currently locked into. Lowering your payment through a refinance is quick and easy.Find out how much you could be saving.Regardless of where you decide to apply, it’s important to make sure your credit is in good shape and that your credit score is as high as possible. Shopping around and comparing rates is key when determining the best lender for your situation.The Best Place to Get a Car Loan: Your Complete GuideIf you are looking for a car loan, there’s good news and there’s bad news: the good news is that there are a lot of places that can help you secure a loan. The bad news is that there are a lot of places that can help you secure a loan. When there are so many options, it’s hard to know what the best choice will be. In this guide, you’ll learn about the options you have when looking for a car loan, steps you can take to get your best rate, and tips to help you decide which lending option is right for you.In this guide, we’ll look at:Where vehicle loans are offered (and the pros and cons of each option)How to get the best rate on your auto loanWhere Can I Get A Car Loan?There are four key kinds of lenders for auto loans:Car dealershipsBanksCredit UnionsOnline lendersCar Dealerships The advantages: ConvenienceThe disadvantages: Higher rates, higher pressureThe bottom line: Dealer financing is not the best place to get a car loan, but if you need a new car and are having trouble getting approved elsewhere it may be your best bet.One of the easiest ways to get a car loan is to simply go to the dealership and arrange for financing when you purchase your new car. Dealers make it easy for you to do everything in-house. They have relationships with certain lenders and can approve you on the spot for financing. This can be good or bad depending on your situation. The biggest advantage to dealer financing is that it is convenient. You don’t need to make any effort other than showing up at the dealership with the necessary paperwork. But with convenience comes the one major disadvantage: you cannot shop around and compare. Taking the time to research and compare rates and lenders can help ensure that you get the best rate, the best terms, and overall best loan available to you. Dealer financing is generally more expensive because the dealer is tacking on additional fees or additional interest on top of the lender’s loan. You are paying for a middle man in addition to paying the lender. Some dealerships have in-house financing companies, which are referred to as captive finance companies. These companies are lending institutions in and of themselves. Captive financing may offer more discounts since they have control of the underwriting process, but they may also inflate prices and can be much more aggressive when trying to upsell you.Traditional BanksThe advantages: Competitive rates, many locations, great customer serviceThe disadvantages: Less flexibility, not great for those with poor creditThe bottom line: A traditional bank is a great place to get a car loan if you have good credit, but if your credit is less than stellar you may have a hard time securing a loan.Going to a traditional bank is a great option for many people looking to secure a car loan. Banks can usually offer the lowest rates and the best terms. However, these rates are reserved for those with the best credit scores and credit history. You may find limitations and restrictions when using a traditional bank—for instance, many traditional banks will not finance a car that is over a certain age or mileage.  Credit UnionsThe advantages: Competitive rates, great customer service, more flexible than traditional banksThe disadvantages: May not meet membership requirements, do not have a lot of locationsThe bottom line: A credit union is a great financing option for many people. They often have the lowest rates and great customer service, but you may need to shop around and determine your eligibility. Credit unions operate in a similar way as banks do, but they are not for-profit and instead distribute their profits to their members. They tend to serve specific locations or communities,as opposed to a traditional bank that might have branches throughout the country or the world. Credit unions may have membership requirements, but they offer many benefits, often offering better interest rates than traditional banks. They can also be more flexible for those who may not meet the standards of a traditional bank. Online LendersThe advantages: Lots of options to compare, competitive ratesThe disadvantages: Requires more research and vetting, which makes this option much more time consumingThe bottom line: If you have the time and patience to use an online lender, you may find the most competitive rates and best terms for your car loan.Online lenders have become an increasingly popular option for car loans in the past decade, and it’s easy to see why. When looking for an online lender, you can easily shop around and compare interest rates and terms. There are so many online lenders that there are usually options for every type of applicant. If you have poor credit, an online lender may be your best bet to get approved, although you will likely end up with a very high interest rate (subprime borrowers can get stuck with loans upwards of 22%). If you have great credit, you may find the most competitive rates online, rates that may even beat those offered by traditional lenders. But these lenders vary greatly in terms of reputation and customer service, so it’s imperative that you do your homework before signing with any online lender. These companies typically require much more vetting than would be necessary with a traditional bank or credit union.  How Can I Get My Best Car Loan Rate?While there are a lot of different places where you can secure a car loan, they all take the same factors into consideration. Your best available car loan rate will depend on the following factors:Your credit score and credit reportYour income and employment historyYour down paymentYour loan termYour carThe current economic conditions Each of these factors is looked at carefully when the lender is determining what car loan rate they will offer.Your Credit Score And Credit ReportThis is the biggest factor that is within your control that will dictate the car loan rate you are offered. Your credit score is a fast and easy way for lenders to determine how creditworthy you are and how likely you are to repay a loan.  Below 580: Poor580 to 669: Fair670 to 739: Good740 to 799: Very Good800 and up: ExceptionalBy fitting your score into one of these brackets, they can easily decide if you are responsible with your accounts and able to manage your money. Lenders can then take a closer look at your credit report to learn more about your financial health. Do you pay your bills on time? Are you in a lot of debt? All of these factors will help lenders decide what rate you are offered. The higher your credit score is, the better your interest rate will be.Concerned about your credit score or payment history? Here are a few resources to help you get your finances on track before applying for financing or refinancing. Improving your score and reducing your debt-to-income ratio can make a huge difference in the financing available to you.What is A Debt-to-Income Ratio and Why Does it Matter?Credit Scores and Car LoansFour Ways to Pay Off Credit Card DebtA Beginner’s Guide to Budgeting: Pay Down Debt Fast8 Simple Tips to Help Improve Your Credit Score Your Income And Employment HistoryLenders want to ensure that you have a source of income to pay for the new car you are getting. They will not want to give you a loan where your payments will be $800 a month if you are only earning $1000 a month.  Your Down PaymentDown payments are important for a lot of reasons, and a sizable down payment can even lower your interest rate. Lenders view you as less risky if they see that you have made a large down payment. Your Loan TermIn general, you will be offered a better interest rate if you select a shorter repayment period. Your loan payments will be higher every month because you are not stretching out your repayment period, but you will save a lot of money in interest.  Your CarThe car that you are buying will also affect the interest rate. New cars come with lower interest rates because they will have a higher resale value should you default on your loan. If you are buying an older car, you may have a harder time finding a loan in general.  Current Economic ConditionsThe only factor that you have no control over whatsoever is the current economic conditions. When the economy is dealing with high inflation, the interest rates will be higher to curb spending and try to stabilize the economy. There is nothing that you can do to change this, so your best bet is to wait until the interest rates go down before securing a new loan. This is not always possible, however, so shopping around for the best rates available to you is especially important when rates are high.Now You Know How To Get The Best Car Loan For You.There are many different lenders that offer car loans, so the more research you do, the better off you will be. Research your options, negotiate where appropriate, and don’t let yourself get pushed into a deal that doesn’t work for you. Already have a car loan but want a redo?Get in touch with Auto Approve today! Our experts can help you refinance your loan and lower your car payment, interest rate, or both.Get your free, no-commitment quote.