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Last week the Federal Reserve announced that, in an effort to curb mounting inflation, it would be raising interest rates in 2022. (FYI: That makes now a great time to refinance your car.)But what does that mean for you and your financial wellbeing? In this article, we will look at what the rise of interest rates could mean for the rest of the year and how you can prepare for it.Here’s everything you need to know about 2022 interest rates.Why are interest rates going to increase?When COVID first touched down in the United States in March of 2020, nobody could predict what it would mean for the future, especially for the economy. Anticipating a shutdown of historic proportions, the Federal Reserve did what it could to curb economic collapse. And part of that plan included slashing interest rates so that people would not stop spending money. So what exactly did the Federal Reserve do? The fed funds rate, which is used as a benchmark for short term lending as well as other consumer rates, was lowered from a range of 1% to 1.25% to a range of 0% to 0.25%. The goal was to reduce the cost of borrowing to encourage spending in all areas of the economy. This helped a lot of people who found themselves strapped for cash. It also motivated people to not sit on the money they did have. Instead, they were encouraged to spend that money and help the economy at large.But playing out on the other side of this was a labor shortage. COVID restrictions kept many businesses closed, while illness and quarantine time kept businesses that were open consistently short-staffed.So we had a consumer base that had an increased demand for items due to low interest rates, and a supply chain that was limited due to staffing. So all of this helped contribute to a perfect storm of high inflation.For the past ten months, inflation has been well above the 2% target, reaching an annual pace of 7% in December 2021.There was a strong hope that the inflation would naturally level off as the economy reopened. As businesses reopened, economists anticipated there would be an increase in labor to balance out the supply and demand. But in January it became clear that more intervention was needed. And that’s why the Federal Reserve decided to increase interest rates.Interest rates are expected to rise initially in March, and then rise two more times before the year is over.How will increased interest rates affect me?So what does this mean for you personally? Increased interest rates will affect you in a few ways. Let’s take a closer look.Your Credit Card Rates Will RiseSince the fed funds rate will increase, the prime rate will increase as well. The Bank Prime Loan Rate is the credit rate that banks extend to their most credit-worthy customers. Credit card rates are based off of the prime rate. Rates have been around 16% but are expected to rise to 17% by the end of the year. Additionally, those applying for new credit may be more extensively risk-profiled.When interest rates rise, consumer spending generally reduces. Getting a New Loan Will Be More ExpensiveAs interest rates increase, it becomes more expensive to borrow money. Whether it’s a personal loan, student loan, or auto loan, it will be more expensive to attain these loans as the months go on. Your Savings Accounts Will Earn MoreOn the flip side of it costing more to borrow, the increase in rates will help your savings accounts. In 2021, Certificates of Deposit (CDs) earned just .13% interest annually. Experts hope that this will increase closer to the 1% mark. A $10,000 CD would thus earn you $100 in interest as opposed to $13 in interest. While that might not be a financial windfall, it will be significantly more than you were earning before.What should I do to prepare for increased interest rates?Pay Down Your Credit Card DebtWhile an increase of 1% to your credit card bill might not be a huge deal in the long run, it can become a burden if money is tight. And if you are only making minimum payments, the amount you owe can really snowball – and fast. This is why you should prioritize getting out of as much debt as you can. If you have some extra money from the student loan deferment, consider using that cash to pay off lingering credit card debt. It may also be a good idea to look into debt consolidation services to make these payments more manageable so that it will not take too much of a toll on your monthly budget and credit score.Refinance Your MortgageIf you did not refinance your mortgage in 2020 or 2021 when the rates were historically low, consider doing so now. Rates are still relatively low, but will likely increase to 4% by the end of the year. If you have a variable rate, you should prioritize refinancing to a fixed rate so that you will have a predictable payment as we go through this economic shift.Refinance Your CarThe good news is that the fed funds increase shouldn’t affect auto loans drastically. The competitive nature of the auto loan industry makes it less sensitive to drastic increases as a result of increased fed rates. But all of this is still a bit uncertain. That is why experts still suggest refinancing your car loan so that you are not caught off guard if or when the auto loan rates do increase.Improve Your CreditA higher credit score will always secure you a lower interest rate, regardless of other factors. This is why it is so important to work towards a good or excellent credit score. Paying down your credit cards and other debts and staying on top of monthly payments are the most important things you can do during this time. Read more here about how you can improve your credit score.That’s how 2022 interest rates will affect you.There is still a lot of economic uncertainty right now, and the announcement of increased interest rates is adding to that uncertainty. But experts agree that now is a perfect time to refinance: car loans, mortgages, and student loans alike. It’s all about securing a low fixed rate for yourself before interest rates increase. And that’s where Auto Approve comes in. We know how overwhelming refinance can seem, so we make it easy for you. Just fill out some basic information and we can get you a quote in minutes. It’s that easy! We handle the paperwork (including the DMV) so you can sit back and save.GET A QUOTE IN 60 SECONDS

Now is the perfect time to get a new set of wheels. Interest rates are set to increase in the coming months, so pulling the trigger now on a new car might be your best bet to secure low interest rates.But when it comes to leasing, you might have a lot of questions. Which is right for you, buying or leasing? What do you look for in a car lease? What terms should you know?Fret not – we’re here to help! Today we are talking all about car leases – the big things and the little things. Because in the end you should be 100% confident you’ve made the right choice with your car lease. Which is Better, To Buy or Lease a Car?Deciding between buying and leasing a car can be difficult as there are pros and cons to both. So before we discuss what to look for in a lease, let’s talk about which is better for you: to buy or lease a car?The Pros of Leasing a CarWhen you lease a car, there are a lot of benefits. First of all, your monthly payments will be significantly lower than if you choose to buy a car. Additionally, your warranty and lease agreement will cover a lot of repairs and maintenance. You will also never need to deal with the hassle of selling the car, and can get a new car every few years. For some people, this is an ideal situation.The Cons of Leasing a CarThe biggest downside of leasing is that it doesn’t give you an opportunity to build equity and the car is not an asset of yours at the end of the day. There are also restrictions of use that may hinder your driving life. There are always mileage limits, so if you drive a lot, leasing will cost you a ton in overage fees. You may be prohibited from leaving the country in your car or using your car for Uber or Lyft. Ultimately the car is not yours, so you can not treat it as if you own it (and forget customizing it in any way).The Pros of Buying a CarThe main upside of buying a car is that it is yours at the end of the day. You can customize it how you want, you can sell it when you want, and you can decide how and when you want to do maintenance and repairs. On top of that, financing is usually easier to get approved for than leasing.The Cons of Buying a CarWhen you buy a car, you will certainly have to put more money down upfront. In fact, the more money you put down, the better off you will be with your monthly payments. This can be a huge deterrent if you do not have a lot of extra cash. You will also end up paying interest on the total amount of the car, as opposed to leasing where you only pay interest on the car for the time that you use it. The Major Things to Look for When You Lease a CarThere is a lot to consider when it comes to buying vs. leasing a car. If you ultimately decide that you want to lease a car, here are the top things to look for in your lease. The Lease Money FactorThink of the lease money factor as the APR on the lease. Instead of being expressed as percentages, they are expressed as small decimals. To make the money factor easier to understand, you can multiply the money factor by 2400 to give you an approximate APR. For example, if the money factor is .00275, you can multiply that by 2400 to get a percentage of 6.6%.Just as with an interest rate, the lower the number the better. Money factors are oftentimes not disclosed on the lease sheet, so you may need to ask the salesman what money factor is being applied to your loan. Having a baseline understanding of what a competitive money factor for your credit score is will help you with your decision. If the money factor you are offered is completely out of line and you sign on the dotted line, you could be paying a lot of extra money.The Cap CostThe capitalized cost, or “cap cost”, is the market value of the car and the baseline of the lease price. Be sure to check a few different websites such as Kelley Blue Book and Edmunds to get a good idea of what the car is worth. This is a good place to start negotiating if the cap cost is not in line with other prices you come across.The Lease Residual ValueThe lease residual value is an estimate of how much your car will be worth when your lease is over. This is typically represented as a percentage of the car’s MSRP (usually between 45-60%). The residual value matters a great deal for your monthly lease payments.Say you lease a $35,000 car for three years with a 60% residual value. This means that at the end of three years your car will be worth $21,000. Your lease would be based on the $14,000 difference (or depreciation) of the car in those three years.But if you lease the same $35,000 car for three years with a 45% residual value, the same car will be worth only $15,750 at the end of the lease. Your lease payments would be based on the $19,250 depricatiation. Since this can make such a huge difference in your lease payments, be sure to ask what residual value the lease is based on.The Drive-Off FeesIn order to drive the car off of the lot, there will be upfront costs. This is a combination of the down payment and any additional fees, such as registration fees.Counter to buying a car, you actually want to put as little money down in the beginning as possible. The way that lease payments are constructed, you do not save a lot of money by paying more upfront. And if your car were to be totaled, there’s no guarantees that you would get that money back.The Overall CostBefore signing anything, determine what the overall cost of the lease will be. Multiply your monthly payment by the life of the loan, adding in all fees and taxes. Is it worth spending that amount on something that you will give back at the end of the lease term? Make sure you are comfortable with the total cost of your lease.Can You Lease a Car Online?Since everything seems to be online today, you may be wondering if you can lease a car online. And the good news is, yes! In fact leasing a car online may get you the best price as you can shop from thousands of dealerships and services. After you’ve picked the perfect car, follow the steps below to get the best deals.Research Dealerships and ServicesFirst step (after picking out your car, of course) is to compare the different companies and dealerships from which you can lease. The dealership website is often a good place to start. Start comparing prices and terms to see who has the best rates and deals.Calculate Lease vs. BuyEven if you are dead set on leasing a car instead of buying, calculate the overall price of both. Make sure you are comfortable with the lease cost knowing that you will be giving the car back after the term is over (unless of course you do a lease purchase through Auto Approve).Apply for Your LeaseAfter you’ve picked your dealership or car service, you can now shop around for a lease. The dealership or service will most likely be able to help you apply easily, but you can also use a different leasing company if you find a better rate online.Sign the Papers and Get InsuranceOnce you’ve been approved for your lease and are happy with all of the terms, you can finally sign on the dotted line. You will need to get insurance, and leases typically have high standards of what type of insurance you will need to get. Make sure you have all of the protection that is outlined in your lease agreement.Decide on ShippingThe main difference between leasing a car online and leasing a car in person is that you will need to have the car shipped to you (unless it’s from a nearby dealership). Dealerships and services will be able to arrange this for you, but you can also make your own arrangements by looking around online. You can save a good chunk of money by arranging this yourself, but it might be more complicated than going through the dealership.And that’s what you should think about when leasing a car.Whether you choose to lease or buy, getting a new car should be an exciting time. Do your research, shop around, and do what works best for your lifestyle.Do you have a lease that you want to purchase? Auto Approve can help!OWN YOUR CAR WITH AUTO LEASE PURCHASEOr are you currently financing your car and overpaying? We can help with that too!REFINANCE WITH AUTO APPROVEGET A QUOTE IN 60 SECONDS

Every new year starts off with–you guessed it!–a new tax season. While it’s definitely not most people’s favorite time of year, now is a good time to start getting organized and preparing your taxes. Tax season has officially started, and while you may not have all of the various documents you need on hand, there are some steps you can take to get organized and prepare for filing.Here are our top tips for getting started on your 2021 taxes.Get Online Make sure you have an online account created on the IRS website. Your account can be helpful in staying organized and can show you the following:View the amounts of Economic Impact Payments you received.Get information on the Child Tax Credit payments.View your 2020 tax information.Creating an account ahead of time will help you get the ball rolling.Gather your DocumentsYou should have a pretty good idea of what documents you need in order to file. Look at previous years to determine what forms you should expect and what forms you may need to track down. In general you need to report any income you make, whether it is from a regular hourly job, from interest earned, or from gig work. The forms required will vary, but some of these documents may include:W-2 forms from your employer.1099-K and 1099-MISC forms from contract positions (if you work in a gig economy or in freelance).1099 forms from your banks, unemployment, dividends, or distributions from pensions, annuities, and retirement plans.1099-K forms from interest you have earned.Forms from virtual currency transactions.Letter 6419 2021 (Total Advance Child Tax Credit Payments)Letter 6475 (Economic Impact Payment)Form 1095-A (Health Insurance Marketplace Statement) These forms will vary greatly from individual to individual depending on your work situation and what type of accounts you own. If you think you may need a document, it’s best to find it and have it on hand in case you need access to it.If you're worried that you'll owe a hefty chunk, you can always put more money back in your pocket by refinancing your vehicle with Auto Approve.Set Up Your Direct DepositThe fastest way to file and get your refund is to file electronically and get your refund through direct deposit. You can do this online through your IRS account. Setting up direct deposit will not only ensure that you receive your refund quickly, but it will reduce the chance of it getting lost in the mail.Get a New ITIN, If NeededIf for one reason or another you do not have a social security number, you will need to make sure you have a valid ITIN (Individual Tax Identification Number). ITIN’s are used to identify and process taxes when a Social Security Number is not available. If your ITIN was not included on a U.S. federal tax return at least once for the previous tax years 2018, 2019, and 2020, your ITIN expired on December 31, 2021. For more information check out the IRS ITIN resource page.Check Your WitholdingsIf you either owed money or received a large refund last year, consider adjusting your withholdings. A large refund means that you could have had extra money in your paycheck every month to help make ends meet. If you ended up owing money, an adjustment to your withholdings could help ensure that you do not have a lump sum that you end up owing. The amount you withhold will ultimately affect your budget (and if you need some help with budgeting, be sure to check out our Guide to Budgeting).Balancing your withholdings is always a good thing to do. If you need help deciding how much to withhold, use this online calculator to help.Get Your Recovery Rebate CreditIf you were not eligible for the third Economic Impact Payment in 2021, or only received part of it, you may be eligible for a Recovery Rebate Credit. The IRS will send you Letter 6475 that will outline any EIP payments you received in 2021. Keep this form for when you file. Note that this only applies to the third Economic Impact Payment issued in 2021, not the first two payments from 2020.Reconcile Child Tax Credit PaymentsIf you received advance child tax credit payments, you must reconcile them with the amount you are allowed to claim. If you received less than you are eligible for, you will be given credit for the difference. If you received more than you are eligible for, you may need to repay the excess. Your Letter 6419 will come from the IRS and tell you how much you received during 2021 (or you can check online). Keep this form for filing.Know the DatesThe 2021 tax filing season has officially begun as of January 24, 2022. Keep in mind that the tax filing deadline for 2021 taxes is April 18, 2022. This is also your deadline to file for an extension if needed. Filing as early as possible will help you get the first round of returns from the IRS, so if you know you have money coming your way that you could really use, file as soon as possible and file online.The IRS has already announced that they face a significant backlog from the 2020 tax season. This backlog is for several reasons, including a budget that has been slashed by more than 20% in the past decade, leading to staffing shortages. Combined with a large amount of staff that were out of work part time for Covid, there were far fewer employees to deal with tax season. To make a bad situation worse, the 2020 tax season was more complicated for many people due to EIP payments, tax credits, and unemployment claims. They had a record number of calls into the IRS helpline in 2021 from people trying to navigate an incredibly complicated tax season.For all of these reasons, getting your 2021 tax return may take a bit longer than usual. The IRS is strongly encouraging taxpayers to file electronically to streamline the process. They still anticipate being able to process returns in a 21-day period.And that’s everything you need to know to prepare for the 2021 tax season.Filing taxes is definitely not a fun task, but it’s one that can come with a reward (think of that big ol’ refund check coming your way). And if getting a bit more money in your pocket sounds enticing to you, think about vehicle refinance. Refinancing your car loan can save you hundreds if not thousands of dollars a year, putting more money back in your hands for the things that matter to you.So what are you waiting for? Get your free quote in just a few clicks!GET A QUOTE IN 60 SECONDS

Having a good credit score is incredibly important when it comes to your financial well-being. A good credit score means that you will more easily be approved for loans, get higher credit limits, better rates, and much more.While getting a good credit score can take years, there are many things you can do right now to help improve your credit score.So let’s jump in!Our top 8 tips on how to improve your credit score.What Makes a Good Credit Score?Credit scores essentially tell a lender how likely you are to pay back a loan that you take out. They also tell lenders how likely you are to pay back that money in a timely fashion. But how exactly do they determine that, and what factors do they consider?Your Payment HistoryOne of the most important factors in your credit score is your payment history. Do you pay your bills on time every month and in full, or do you have a tendency of missing payments here and there and not always paying in full? This history makes up 35% of your credit score.How Much Money You OweIf you owe a lot of money and are in a good deal of debt, this will affect your credit score negatively. Lenders look at what is called your Credit Utilization Ratio, which compares how much credit you have available to how much debt you are in. If you have a $20,000 credit limit but owe $15,000, you will have a Credit Utilization Ratio of 75%. But if you have a credit limit of $20,000 and only owe $1,000, you have a Credit Utilization Ratio of 5%. The lower your ratio is, the better your credit score will be. Experts recommend keeping your Credit Utilization Ratio below 30%. How much money you owe makes up 30% of your credit score.Other FactorsWhile credit history and your credit utilization make up the majority of your credit score, there are a few other factors that play a role in your credit score.The age of your loans and lines of credit also affects your credit score. Keeping your accounts active for a long period of time (particularly when they are in good standing) will help give you a good credit score. If you are young and starting out on your credit journey, you will find it hard to get an excellent score because of this. TTha age of your accounts make up 15% of your credit score.Your credit mix is another factor in your credit score. This refers to the different types of accounts you have. It is good to have a mix of credit cards, loans, mortgages, etc. This accounts for 10% of your score.The last factor is the amount of new credit you have. If you have accounts that are new, or a lot of credit inquiries, this will count against you negatively. Since they are new, there is not as much of an established track record that you will pay these debts back. This accounts for 10% of your score as well.Why is a Good Credit Score Important?Having a good credit score tells lenders that you take your finances seriously and that you are dependable. After all, lenders are in the business of making money, so they want to ensure you will pay them back. Having a good credit score will 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 accountsThese are all great reasons why you should want your credit score to be as good as possible.How Can I Improve My Credit Score?While building a good credit score takes time, there are some things you can do right now to help improve your score. Here are our top 8 tips for improving your credit score.Make On Time PaymentsAs we said before, your payment history is one of the most important factors in your credit score. Committing to making on time, consistent payments is the best way to increase your credit score. In just a few months you can see your score improve by prioritizing this.Boost your ScoreA new service called Experian Boost can increase your credit score instantly by including account payment histories that are typically excluded from credit score calculations. But how does this work?Utility and phone bills are usually not included in your credit score. Experian however looks at your bank account and identifies qualifying accounts that you make timely payments on, and gives you credit for those on-time payments. For example, your on-time Netflix payment would not normally count towards your credit score, but with Experian Boost, it would count positively. And the best part? If Experian finds that you don’t have a good history with these accounts, it won’t count them against you.Get A Debit Card that Builds CreditBuilding credit can be very hard, especially in the very beginning. But a new debit card is aiming to change that. The Extra Debit card connects to your existing bank account and your credit limit is based on your bank account balance. Every time you use your card to purchase something, you help build your credit. The Extra Debit card even has perks like a credit card does, like 1% back on all of your purchases. This debit card pays itself off every day, causing it’s credit utilization to reset every 24 hours. So you essentially have a card that pays itself off with no interest and can keep you below the suggested 30% Credit Utilization Ratio.Refinance your Car LoanWait – you are probably wondering “does refinancing affect credit scores” – and the answer is yes! A great way to improve your credit score is to refinance your car loan. It’s important to note that this will not instantly raise your credit score (in fact the hard inquiry on your account may temporarily ding your score). But refinancing your car loan can help you out in the long run. First of all, when you refinance you may be eligible for a lower APR than you are currently paying. This will save you money in interest. Refinancing will also allow you to change your payment schedule and adjust how much you are paying every month. If you are consistently tight with cash, freeing up money every month can make a significant difference in your budget and can help you pay off existing debt.Find out how much you could save with a free, instant quote (no credit check required!) from Auto Approve today.Set Up AutopayIf there are some bills that you just keep forgetting to pay, try signing up for autopay. Most companies have some version of an automatic payment system that can help you stay organized with payments. While it’s a simple step, this can help reduce missed or late payments if they are a consistent problem for your credit score.Check your Credit Report and Dispute any ErrorsYou should get in the habit of checking your credit report at least three times per year. This will help protect you from identity theft and will allow you to flag anything that is reported incorrectly. If an account reports missed payments to the credit bureau that you know were paid, this can affect your credit score substantially. If you notice an irregularity or mistake, you should notify the bureau immediately to have it addressed.Get a Higher Credit LimitIf you have a credit card that you are in good standing with, reach out to see if you can get a higher credit limit. If your credit score increased since your last limit increase or your income has increased, you may be eligible for a higher limit. And remember – a higher limit means that your Credit Utilization Ratio will automatically drop, as your available credit will increase. Pay Down Debt StrategicallyYour credit score looks at your overall debt to credit limit ratio, as well as this ratio for individual accounts. So if you have an account with a credit limit of $1500 and a debt of $1000, you have a 66% Credit Utilization Score for that account. Paying down these accounts first will help decrease that ratio and help your score much more than if you pay down another bill that has a lower ratio. Even if you owe more money on the other account, paying down the smaller bill may be more beneficial.Those are our top tips for improving your credit score.Having a good credit score is vitally important to having a healthy financial future. Try out some of these tips and see how they affect your credit score. If refinancing your car loan is something you are considering, reach out to Auto Approve to see how much money we can save you!GET A QUOTE IN 60 SECONDS

You’ve read countless ratings and reviews, you’ve combed over the specs and compared gas mileages, you’ve picked out the perfect color and trim. Now, you’re finally ready to pull the trigger on your car lease. But are you prepared to negotiate your lease? Do you know the lingo? Do you know what is worth fighting for and what isn’t? Don't sweat it – we’ve got you covered! Here’s everything you need to know about negotiating your car lease.Getting the Best Rate When You Lease a CarWhen you lease a car, you want to do your homework and thoroughly research the lease deals that are out there. Look around at different dealerships and compare the different offers. You can always use this information when negotiating to get more competitive deals.Here are the top factors you want to negotiate in your lease.Capitalized CostThe capitalized cost, also called the “cap cost”, is the agreed upon value of the car. It is essentially the sale price. This is a great place to start negotiating. Getting a lower cap cost will greatly reduce your loan payments. Check a few different websites to get a good idea of the car’s value. Sites like Kelley Blue Book and Consumer Reports are great places to start.Money FactorA money factor, or rent charge, is essentially the APR on the lease. Money factors are expressed as very small numbers (like .00275), so to make it easier to understand you can multiply the money factor by 2400 to give you an approximate APR (.00275 x 2400= 6.6%). Some dealers will claim that the money factor is non-negotiable, but that doesn’t mean you should just say yes and accept the number they give you. Money factors are set by lending institutions and are not easily changed, but some dealerships will add on to the money factor for additional profit. You want to be diligent and make sure that it is in line with what prevailing market rates are. Before you even set foot in a dealership, research what the current money factor range is.Lease TermThis isn’t really something that you have to “negotiate”, but it is something that you will have to decide. Leases usually range from 36-72 months, so you can decide how long you want to have this particular car. If you like to always have the newest car and technology, opting for a shorter lease is probably your best bet. If you are a creature of habit and prefer consistency, a longer lease term is probably preferable for you.Mileage AllowanceDepending on how much you drive, this might be a huge deal for you. Leases will always put a cap on the amount of miles you can put on your car and charge you when you go beyond your limit. It will most likely be cheaper for you to negotiate a change in terms upfront and get a larger mileage amount than to pay the overage fees. Sometimes the fees of going over the mileage limit are so outrageous that it makes sense to consider auto lease purchase. Which is Right for You: Lease vs. Buy (Car, Truck, or SUV)The biggest difference when it comes to lease vs. buy–car, truck, or SUV–is ultimately who owns the car. When you lease a car, it is owned by the dealership and you are paying to use it (think of it as renting a car). When you buy a car, you own it outright. If buying a car involves financing, the car is owned by the lender and once you finish making payments the car is yours.But what are some of the other differences when it comes to leasing vs. buying?PaymentsIn general, lease payments will be lower than financing payments. This is because you are paying for the time you are using the car and not the total value of the car. When you lease a car, you are paying for the depreciation of the car in the time that you are using it.MileageLeases almost always have mileage limits that you will be penalized if you go over. For example, if you go over 10,000 miles per year, you will be charged a certain amount per mile that you exceed. If you buy a car, there is no limit to your mileage. Wear and TearLeases will have terms that specify the condition of the car that must be returned. If there is anything that they deem to be beyond normal wear and tear, they will penalize you financially. If you buy the car, you do not need to worry about this (it’s yours after all!)CustomizationIf you lease a car, you will not be able to customize it in a way that you may want to. No aftermarket paint jobs or tinted windows–the car must be returned to the dealership in its original form. If you own the car, this is not something you need to worry about.MaintenanceWhen you buy a car, you are responsible for all maintenance and repairs. If it is not covered under your warranty, the bill is your responsibility. When you lease a car, some maintenance and repairs will be covered under the lease agreement (this can include oil changes as well).The Bottom LineWhen it comes to leasing vs. buying a car, it is highly dependent on the individual and their driving habits. If you like the idea of trading your car in every few years and starting fresh, leasing might be a good option. If you intend to keep your car for the long haul, buying will make more sense. And if you change your mind and want to keep your leased vehicle, there’s always auto lease purchase.Where To Find The Best Car Lease DealsIf leasing makes sense for your lifestyle, you are probably now wondering where you can find the best car lease deals. There is no one stop shop for finding the best lease deal. You will need to do your homework and shop around. The area you live in as well as your credit score will affect what deals are available to you. Check out sites like CarFax and Kelley Blue Book to find the best deals in your area. If you have a lease and you’ve gone over the terms (say you drove a few too many miles or you have quite a bit of wear and tear), you should consider an auto lease purchase. Auto Approve specializes in auto lease purchases, making it easy for you to finance your purchase. And that’s what you should consider when you negotiate a car lease.When you lease a car, you will have to make many decisions, from the length of the lease to your monthly budget allowance. But if you shop around and look for the best rates, you can get a lease that’s right for you.Want to purchase your current leased car? Auto Approve can help with that, too! GET A QUOTE IN 60 SECONDS

When the coronavirus hit headlines almost two years ago, the government delayed the repayment of student loans for millions of people to give them some economic reprieve. The Biden administration recently announced that they would extend the student loan payment delay to May 1st to give borrowers more time to adjust to repayment. This delayed repayment will affect about 27 million borrowers. So what does this mean for you and your finances?Here are our top tips for preparing for the restart of student payments.While student loans are deferred for the next few months, you should use this time to get your finances in order for when payments kick off again. Getting an organized budget and payment plan in place should be your top priority in this time period. Follow our tips below to make sure you are prepared.Contact your LenderFirst off, make sure your contact information is up to date with your lender. This will ensure that when things start back up you will not miss any payments. Missed payments can harshly affect your credit score. If you are unsure of who your lender is, go to StudentAid.gov and log into your account dashboard. The “My Loan Services” section will have the contact information that you need.Contact your lender to determine exactly when your next payment will be due. If you haven’t changed your repayment plan since the deferment started, your payment due date should be the same date of the month that it was previously. If you were enrolled in an automatic payment plan before the first pandemic deferment (March 2020), YOU WILL NEED TO OPT BACK IN. This is important; you do not want to assume that the payment will be made automatically. If you signed up for automatic payment after March 2020, you should still be on an automatic payment plan. But always double check to be sure. Again, missing payments can have disastrous effects on your credit score.You should receive a statement three weeks before your first payment is due. Revisit your BudgetYou may be wondering if you will be able to keep up with your monthly payments when the student loan repayment starts back up again. Now is a great time to restart (or start!) your budget. ExpensesTo start your budget, figure out all of your fixed expenses for the month. These are costs that do not vary from month to month and can include your rent or mortgage, car payment, cable bill, and internet, among others. Your student loan payment would fall into this category. Next figure out all of your variable expenses for the month. These are expenses that change from month to month. They might include your groceries, electric bill, and entertainment. Look at credit card statements or receipts to determine what your average expense is in each category.IncomeNext up look at your income. Include your full time job as well as any other additional income you may have from side jobs. Balance It OutOnce you see how much you have coming in every month vs. what you have going out every month, you can see how balanced your budget is. Do you have extra money every month? Great! You can put some of it in savings or an emergency fund, or set it aside to make additional student loan payments. If you do not have extra money every month but are instead in the red, see where you can make adjustments and cut spending. Consider making the following adjustments to your spending habits:Switch from name brand to generic when grocery shoppingCut out subscription services that you don’t need (Netflix, Hulu, HBO; what can you live without?)Be diligent about turning appliances off when you aren’t using them. Cut back on eating out and ordering takeoutAdditionally, auto refinancing might be a good way to reduce your monthly expenses. Refinancing to either a lower APR or extending the repayment plan of your car loan can affect your monthly payment a great deal. If you have a car loan, contact Auto Approve to get a quote and see how much money they can free up in your monthly budget.If you know that your student loan payments will be unmanageable, you should consider adjusting your payment plan. And for a more in-depth look at creating a budget, check out our blog post on budgeting 101.Look Ahead and Adjust Your Payment Plan (If Necessary)You should have a good idea of what your monthly payments will be when the deferment is over. And if you prepare a budget, you should have a good idea of what you are able to spend on your student loan every month. Look at your current student loan repayment plan and decide if you need to change to a different repayment method.Repayment plans are either calculated over a set period of time, or they are income driven. Let’s look at these in more depth.Fixed Time RepaymentYour repayment plan is most likely calculated over a set period of time. These can be broken down into three categories, each with different terms and conditions. Standard Repayment: Also known as fixed payment loans, this is the payment plan you will default to if you do not pick another type. Under this repayment you will pay a fixed amount every month of at least $50 for up to 10 years depending on the size of your loan. You will pay the least amount of interest under this plan and pay off your loan quickest.Graduated Repayment: Graduated repayment means that your payments will be lower in the beginning and increase as time goes on. This can be especially helpful when you first graduate, as you will expect to make more money as time goes on and you advance in your career.  Only certain loans are eligible for this type of repayment.  Extended Repayment: Under extended repayment, your monthly payments will be much lower but you will repay the total amount over a much longer time period. Switching from a standard repayment plan to either a graduated repayment or extended repayment may be a good option if you expect to have a difficult time making your current monthly payments.Income-Driven Repayment PlanIf you are having trouble with a fixed repayment schedule, you may be eligible to switch to an income-driven repayment plan. These repayment plans are based on how much money you earn, so they are especially helpful if you are not earning what you may have expected to earn. These loans also forgive your remaining balance after a set number of years. These repayment plans are complicated and have many rules, but if you can reconfigure your loan to an income-driven repayment, you may save yourself a lot of money in the long run.Deciding on a Repayment PlanIf you are wondering what repayment plan is best for you, there are tools out there that can help you decide. StudentAid.gov has a loan simulator that can help you decide which is best for you. Whether your goal is to reduce monthly payments or pay off your loan as soon as possible, the simulator will help you decide what you qualify for and what is the best option for you.Look into Deferment or Forbearance Only in EmergenciesWhen May comes and it’s time to restart payments, you may enter into panic mode and opt for deferment or forbearance. While these are options, it is important to remember that these should be used only in dire situations.What’s the difference between forbearance and deferment? In forbearance, your monthly payments will stop but interest will still accrue. In deferment, your interest will stop accruing for the time that your loan is deferred. Deference is definitely preferable to forbearance and can provide additional relief if you are in tough times. But remember that you will still be accountable for the money that you owe.Forbearance should always be a last resort and should only be used temporarily. If you have a large, unexpected bill (such as a large home repair or unexpected medical bill) forbearance might be your only option. But your loan will still accrue interest and your payments can balloon if you are not careful. Those are our top tips for preparing for the restart of student loan payments.The past few years have been financially difficult for so many people. It’s important to keep in mind however that help is available. Whether you need help with changing your repayment plan or need help with budgeting, there are resources available to help you determine the best path forward.If you need some extra breathing room in your budget, consider auto refinance. By lowering your APR or lengthening your repayment plan you may be able to free up money in your monthly budget. Set yourself up for success before the repayment starts and contact Auto Approve to get your free quote today!GET A QUOTE IN 60 SECONDS

If you are looking to refinance your car loan, you might have a lot of questions. On the top of that list is probably “Do I meet the requirements to refinance?” Car loan refinancing does have some requirements, but if you are eligible, you can save a whole lot of money by doing so.Here we will discuss some of the basic requirements to refinance a vehicle, help you decide when the time is right, and give you some tips on choosing the right car refinance company. So let’s dive into the ins and outs of car loan refinancing!The Basic Qualifications for a Car RefinanceWhen looking into car refinance, there are a few qualifications of which you should be aware. The specifics will vary from lender to lender, but in general these are the elements you may need to consider.Your Car’s Age and ConditionLenders will often have age limits and mileage limits on refinancing. Some lenders may not refinance your car if it is more than ten years old, or if it has more than 100,000 miles on it. Additionally, lenders will not refinance your loan if it is upside down, meaning that you owe more on your car than it is worth. If your car is a few years old and/or you drive a lot, you will need to keep this in mind while looking around at lenders. Depreciation is always something that you should keep an eye on while you are financing. Checking your car’s value routinely on a site such as Kelley Blue Book will help alert you if you are in danger of becoming upside down on your loan.The Time Left on your Current LoanThere may be requirements about how much time is remaining on your current loan. If there is less than a year left on your loan, lenders may not choose to approve you. This is because car loans are front-loaded amortized loans, meaning that the majority of the interest is paid in the beginning of the loan. As the loan nears the end of it’s time, you are paying less and less in interest and more and more in principal. At a certain point it is not worthwhile for a lender to refinance you, as they will not really be making any money off of you.Furthermore, your current loan may have prepayment penalties that may make refinancing difficult. If the prepayment penalties outweigh any savings from refinancing, it will probably not make sense to refinance even if you do qualify.Your CreditYour credit score is a major component of your refinancing requirements. A credit score shows a lender how likely a person is to pay back the money they are borrowing. Credit scores are comprised of five major components:Payment History (35% of your credit score): This shows lenders if you pay your credit accounts on time or not. It will also show missed payments and bankruptcy details.Accounts Owed (30% of your credit score): This refers to the amount of money you owe. This number is considered in relation to how much credit you have available to you (your credit utilization ratio). Length of Credit History (15% of your credit score): The longer you have had credit, the higher your score will be.Credit Mix (10% of your credit score): You will need a good mix of retail accounts such as credit cards, loans, and mortgages for a good score.New Credit (10% of your credit score): If you open new accounts or have hard inquiries into your credit, your score will decrease. If your credit score has dropped drastically since your initial financing, you may not qualify for refinancing. If your score has dropped a little since your initial financing, you may qualify, but not qualify for a good APR. You should always ensure that your credit score is in as good of a shape as possible before refinancing your loan. To do this, commit to making on time, consistent payments to all of your accounts. Work to pay down outstanding debts if at all possible. Additionally, try to hold off on opening any new accounts or signing up for anything that might trigger a hard inquiry. While only temporary, these inquiries and new accounts will cause your score to drop. Your Current PaymentsIn addition to your credit, lenders will look specifically to make sure that you are up to date on your payments with your current lender. After all, if you are not paying your current lender in full with consistency, why would they risk lending you money?Choosing the Right Time to Refinance CarTiming is incredibly important when it comes to refinance. Car loans will be most beneficial to refinance when the market values are low, your credit score is high, and you are towards the beginning and middle of your repayment.Low APRs You will be best served to look into refinancing when the market interest rates are low (like right now!) When interest rates are low in general, you will find much better rates available to you than when the market interest rates are high.Credit ScoreAs we discussed before, the higher your credit score is, the better of an interest rate you will be offered. Focus on increasing your credit score before approaching lenders.Repayment PeriodRefinancing your loan makes more sense when you are towards the beginning or middle of your loan. As we discussed before, car loans are amortized and front loaded. In the beginning of your loan, your payments go more towards the interest than towards the principal. This means that refinancing to a lower rate will be more beneficial when you are paying the most towards that interest, i.e. in the beginning of the loan.You will need to make sure that all of the paperwork is finalized on your initial financing before you apply for refinancing, which can take anywhere from 30-90 days. After that you can then refinance your loan immediately, technically speaking. Experts do however recommend waiting 6-12 months before refinancing. This will give your credit score a chance to recover from the hard inquiries of your initial loan. This will also give you time to make consistent, on-time payments on your initial financing, which will also help ensure you have the best credit possible (and you are therefore offered the best APR possible).But remember, the earlier you refinance, the more money you will be able to save. It’s all about finding the sweet spot when it is most beneficial AND you will score the best rates.Your Cash FlowIf current circumstances in your life have made your monthly budget tight, it might be a good idea to consider refinancing. Lengthening the repayment period of your loan will decrease your monthly payments by spreading them out, ultimately giving you some wiggle room in your budget. And if you can qualify for a lower APR on top of changing your repayment period, you may be able to save a good deal of money overall as well.How To Choose Between Car Refinance CompaniesIf the time seems right to pursue refinancing, you will now need to choose between car refinance companies. In general, you should apply to 3-5 lenders to get some competitive quotes. This will give you a chance to look at several offers and compare not only their rates, but their other terms as well (including repayment periods, prepayment penalties, etc). You should look at traditional banks as well as credit unions and online lenders. Until you actually apply, it’s hard to get an idea of what your rate or terms will look like.A great way to ensure you are getting competitive rates is to use a company that will do this legwork for you. Companies that specialize in auto refinance, like Auto Approve, already have relationships with lenders and can get you the best rates possible. By simply filling out an online quote form, we can get you a quote in minutes. Auto Approve will even handle the paperwork for you–DMV forms included. Auto Approve has a sterling reputation from the industry as well as from real life customers. We have an A+ rating from the Better Business Bureau and a 96% would-recommend rating from TrustPilot. Our customers know that we work tirelessly to find the best auto refinance rates and will never markup the prices–we pass the savings on directly to you.And that’s everything you need to know about refinancing a car loan.There are some things that you need to consider before you refinance your car. But if your car qualifies, the market rates are low, and your finances are in order, it might be a great idea to consider refinancing your vehicle. Customers who shop with Auto Approve save hundreds–sometimes thousands!–of dollars by refinancing their car loans. So if the time is right for you, don’t wait another minute to start saving money!GET A QUOTE IN 60 SECONDS

If you are like most people, you are more than likely overpaying on your car loan. Whether you got talked into a higher APR at the dealership, or your credit has simply improved, chances are there are lower rates out there that could be saving you loads of money every month. But don’t just take our word for it–in this article we will look at how auto refinance works and discuss why you should consider refinancing your vehicle.Refinancing is when you pay off your existing loan with a new loan that ideally has better terms. Auto refinance will get you out of the current financing relationship that you are in and let you start over with different terms that can change your APR, repayment terms, penalties, and other miscellaneous conditions of your loan. There are many reasons that auto refinance can benefit you.When Is The Best Time To Refinance Your Auto Loan?Like a lot of things in life, timing is everything. It is important to keep this in mind when you are thinking about refinance. Auto loan refinancing is certainly more beneficial at certain times than at others.When Can I Refinance? You are allowed to refinance at any point in your loan. You will however need to wait for any paperwork to be finalized on your initial loan, which can take anywhere from 30 to 90 days. But once everything is signed and filed, you are able to refinance. Experts recommend waiting 6-12 months before refinancing. There are a few reasons for this. First of all, this will give your credit score a chance to recover from the hard inquiries of your initial loan. When you apply for a new line of credit, your score will take a slight hit. It is best to wait until your score recovers from this. The better your credit score is, the better APR you will be offered. The second reason you should 6-12 months is to give yourself time to make consistent, on-time payments. If you can make full and timely payments on your auto loan, this will help improve your credit score. Again, the better your credit score, the better the APR you are offered will be. When is the Best Time to Refinance?There is definitely a sweet spot in your car financing timeline to think about auto refinancing. Car loans are amortized and “front-loaded”, which means that in the beginning your payments aren’t split evenly between your interest and your principal. Instead, you pay off more of the interest in the beginning than you do the principal. Let’s look at an amortization schedule to see how the first four monthly payments are divided.As time goes on, you pay less and less towards the interest and more and more towards the principal.This means that towards the end of your loan, you are mostly paying the principal and little of the interest. When you refinance, the money you are hoping to save comes from the savings in interest payments. So it is more beneficial to refinance when you have at least a year (preferably two years) left on your loan payments. This will make it the most beneficial for you.What Are the Other Benefits of Refinancing?Aside from saving money (which is probably reason enough), what are the other benefits to auto refinancing? For many, reducing monthly payments is a huge benefit. Even if you do not secure a substantially lower APR, refinancing allows you to change your repayment plans and stretch your payments over a longer period of time, which can loosen up your monthly budget significantly.Refinancing is also the only way you can add or remove a co-borrower from your vehicle. Whether you want to add your child on as a co-borrower to help them build credit or remove a co-borrower because you no longer need their financial assistance, refinancing is the way to achieve this. Are There Any Risks When Refinancing an Auto Loan?When you decide to pursue an auto loan refinance, you may be wondering what the risks are. Just as there are good times to refinance, there are also bad times when it will not make as much sense for you. So when is it a bad time to refinance and when do the risks outweigh the benefits? Your credit score has taken a hitIf your credit score has recently decreased, there’s a good chance you won’t be eligible for a lower APR. Maybe your credit score dropped because you have recently opened other accounts or you hit a rough patch and were not able to make consistent on time payments. No matter what the reason is, a lower credit score may make refinancing less beneficial.The market rates are highThe APRs that are offered are dictated in part by the market rates. If your prevailing interest rates are higher than when you originally financed your vehicle, you will most likely not find a better APR.You have significant prepayment penaltiesA major risk of refinancing is the prepayment penalties to which you may be bound. Read your loan contract carefully to determine what penalties you may have to pay if you choose to leave your lease early. The amount you will pay in penalties may outweigh your savings.You have less than a year left on your loanAs you near the end of your loan your payments will go against the principal more than the interest. You will ultimately not save much by lowering the APR, and you may not qualify for refinancing if the repayment term left is short.You need a high credit score for other reasonsIf you are trying to apply for a mortgage or need a high rating for another reason, remember that refinancing will cause a slight dip in your score. Refinancing will cause a hard inquiry into your account as well as change your credit history. While these shouldn’t be drastic hits, if you are applying for a mortgage it may cost you a slightly higher APR for that account.Your car value has taken a hitIf your car has deprecated a good deal you may not qualify for refinancing. Depreciation can occur for a number of reasons:Mileage. The more you drive your car, the more it depreciates. High mileage shortens the amount of usable time left on the car.Age. The older a car is, the less it’s worth. Even if it still drives perfectly, the fact that it is an older model will reduce the value.Make and Model. If you are driving a more popular model, your car will depreciate slower. Value is based on how much someone is willing to pay. The more people want your car, the more they will pay for it. If you have a less desirable car, expect your car to depreciate at a faster rate.Condition. If your car has been in a few accidents or hasn’t been consistently maintained, it’s value may be depreciated. If depreciation lowers your car value significantly, refinancing might not be an option for you.Who Has The Best Auto Refinance Rates?If auto refinance sounds like it might be a good option for you, you now need to figure out when you can find the best auto refinance rates. It is incredibly important to shop around for rates when you are looking to refinance. You should do research to determine what your options are, trying to select 3-5 lenders to apply to. You will not have a good idea of what the terms are or what APR you qualify for until you actually apply. The most efficient way to shop around and find the best auto refinance rates is to use a company that will do the legwork for you. Companies that specialize in auto refinance, like Auto Approve, have editing relationships with lenders and can streamline the application process for you. By simply filling out an online quote form, they can get you a quote in minutes. They can handle all of the paperwork too (yes, even the DMV forms). When looking for a lender, you want someone that you can trust. With an A+ rating from the Better Business Bureau and a 96% would-recommend rating from TrustPilot, you don’t need to take it from us. Our customers know that we find the best auto refinance rates and will never markup the prices–we pass the savings on directly to you.And those are the reasons that you should consider an auto refinance.There are so many benefits to vehicle refinancing, from allowing you to lower your APR to reducing your monthly payments. Still have questions? Contact us today to get started!GET A QUOTE IN 60 SECONDS

If you are unhappy with your current auto loan, an auto refinance might be a great option for you.Whether you are looking to lower your monthly payments or lower your APR, you can save a lot of money in the short and long term by refinancing your car loan. Let’s look at how auto refinancing works and see just how much money you may be able to save. Looking To Refinance Your Auto Loan? Here's How It WorksFirst things first, what does it mean to refinance? Auto loan, mortgage, and student loan refinancing are all similar, in that you are paying off your existing loan with a new loan.Ideally, your new loan will give you better terms. Whether those better terms are a lower APR, a longer repayment period, or an added co-borrower depends on what your goals in refinancing are.When you refinance, you will apply to various lenders to find the best rates and terms available to you. You can simplify this by going Auto Approve who will do the shopping around and comparing on your behalf. What Are The Benefits of Refinancing Your Auto Loan?There are a few major changes that refinancing can provide for you. But how much money can these changes save you?Lower APROne of the main reasons people look into auto loan refinance is to get a lower APR. There are a number of reasons why people may now qualify for a lower APR now than when they originally financed their loan. These reasons could include:Improved Credit Score - You might have a much better credit score now. This could be the result of consistent, on time payments and the paying down of debt.Initial Bad APR - If you had bad timing with your original loan and got an initial less than desirable APR, a lower rate might be possible.Better Market Rates - If the national APRs are lower than when you originally financed your car, a lower rate may be possible.Whatever your reason is, securing a lower APR can save you a lot of money. Let’s say you initially financed $25,000 of your new car at an APR of 6% for a 5 year term. Your monthly payments would be $483.32. You would pay a total of $28,999.20 at the end of your 5 years.If you were able to reduce that APR to 3.4% over the same period, your monthly payments would be $453.67. Over the course of 5 years you would pay $27,220.20. The lower interest rate would save you nearly $2000. Lower Monthly PaymentsIf you are able to reduce your APR, you will be able to secure lower monthly payments. But that’s not the only way auto loan refinance can reduce your monthly payments. Lengthening your repayment period can also reduce your monthly payments.If you initially finance a car at 5% APR for $20,000 principal over a term of 3 years, your monthly payments will be $599.42. Over the course of 3 years you will pay $21,579.12.If you finance at the same 5% APR but spread that over 5 years, your monthly payments will be $377.42. Over the course of 5 years you will pay $22,645.20. You will end up spending more overall, but if your goal is to cut down on your monthly bills, lengthening your repayment period would cut your bills significantly. Adding a Co-BorrowerIf your credit hasn’t increased, or hasn’t increased enough to secure a lower APR, adding a co-borrower might be a good idea. You cannot add or remove people from an existing loan, but auto loan refinance allows you to add or remove a co-borrower. The lender will consider your combined credit scores, so if you have someone in your life who has very healthy financials, adding them to your refinance might be a good idea. This can qualify you for a lower APR, which can save you thousands of dollars in the long run.Removing a Co-BorrowerIf you are in a better financial situation than you were previously and no longer need a co-borrower, the only way to remove them from the loan is through auto loan refinance. You Want a New LenderIf you are unhappy with your current lender, auto loan refinance is a good way to terminate that relationship and start a new one. The most common complaints about financing companies often center around communication issues and a lack of transparency as to where your payments are actually going and being allocated. If this is something you are experiencing, you can get out of your current situation and refinance with a company that has higher customer satisfaction.How Much Can You Actually Save By Refinancing Your Vehicle?In short? You can save thousands! The relatively conservative examples we gave above showed how the people in the examples could save $1,779 by refinancing to a lower APR and $1,066 by refinancing to shorter payment terms. But to find out how much you in particular can save, you can use the Savings Calculator on our homepage to get a rough idea or use our quick and free quoting form to find out more specifically how we can save you a bundle of money.What Kind of Credit Do I Need To Apply for Auto Refinancing?You may be wondering “What credit score do I need to refinance my car?” While there is no magic number, it’s true that having a good credit score will help save you more money when you refinance. While it may be technically possible to refinance with poor credit, it is much more beneficial to do so when your credit score is higher (and, with Auto Approve, you're unlikely to have many, if any, options).A good credit score is important for many reasons. Credit scores indicate to lenders and auto refinance companies how likely a person is to pay back their debts. Having a good credit score will get you better interest rates on credit cards and loans, higher credit limits, better insurance rates, easier approvals for rentals, a better chance at credit approvals, and gives you more negotiating power when securing accounts.Securing a lower APR is the key to saving the most amount of money, as we see in our examples. The key to securing a lower APR is to have good credit and good timing–the market rates have a good amount of sway over the APR you will be offered. While it may be possible to refinance with a low credit score, doing so will probably not save you money in the long run. You will most likely not qualify for a lower APR, so the main benefit would be changing your repayment term. If you lengthen your repayment term, you can reduce your monthly payments even if the APR remains the same. If you are drowning financially and need some extra breathing room, this might be an option for you. But refinancing will always be most beneficial if your credit score has increased and you are creditworthy.And that is how refinancing your auto loan can save you a lot of money.If you are unhappy with your current financing, refinancing might be a great option for you. Auto Approve is dedicated to finding you the best refinance rates. And with an A+ rating from the Better Business Bureau, you know you’re in good hands.GET A QUOTE IN 60 SECONDS

Looking to refinance? Car loan payments can easily overwhelm your monthly budget, and as we head into the new year you may be looking to give your finances a tune-up. But what if your credit score is less than ideal? Is refinancing your car loan even an option? At Auto Approve, we’re here to help and answer all of your questions about refinancing with bad credit and help you get the best refinance rates possible.What's Considered A Good or Bad Credit Score?What do we mean by “bad credit”, and how important is it in terms of refinance? Car, SUV, and truck refinance are more beneficial when you have an increased credit score. Before we dive into refinancing, let’s look at how credit scores are calculated and what is considered a good or bad credit score. Your Credit ScoreCredit scores are used by lenders to determine how likely a person is to pay back their debts.These scores are calculated based on five metrics: Payment History (Your history of on-time, full payments)Amounts Owed (The amount of money you owe vs how much credit you have available to you)Credit History Length (The age of your credit accounts)Credit Mix (The diversity or assortment of your debts)New Credit (The number of new accounts you have opened plus the amount of hard inquiries you have)All of these metrics are important to your credit score, but your payment history and your amounts owed weigh the heaviest and matter the most to your credit score.What’s Considered a Bad Credit ScoreCredit scores range from 350 to 850 and fall in the following brackets:800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor creditIf you have fair credit or poor credit, you are considered to be less desirable (this is considered “bad credit”). People with the highest credit scores (740 and above, typically) will more easily be approved for loans and credit applications, and will typically get the best interest rates and APRs. Why Is a Good Credit Score ImportantHaving a good credit score is vital for a number of reasons. Having a good credit score shows lenders that you are reliable and pay back your debts in a timely manner. A good credit score will give you:Lower interest rates on credit cards and loansBetter chance for credit card and loan approvalHigher credit limitsBetter insurance ratesEasier approval for rentalsMore negotiating power for loans and accountsWorking to secure a good credit score will pay off a lot in the long run, especially when it comes to refinance. Car, SUV, and truck refinancing can be incredibly beneficial if your credit score has increased. How Refinancing Can Affect Your Credit ScoreWhen you refinance your car, it will affect two of your credit categories: Credit History Length and New Credit. Since you are closing one account (the old loan which you are paying off) and opening a new one, it will reduce the score of your credit history. But credit history only makes up for 15% of your score and as the account ages, this number will improve.Your New Credit will also take a hit, from the new account you are opening plus the hard inquiries that are made on your credit. Be sure to apply to all of your lenders within a fourteen day period–this is the grace period that credit bureaus allow for inquiries. This means that all inquiries within that timeframe will count as one hard inquiry against your credit. Hard inquiries only stay on your credit report for a year, so it is only a temporary ding. New Credit only accounts for 10% of your credit score, so it is not a major component.Is it Possible to Refinance a Car Loan When You Have Bad Credit?While it always depends on your specific situation, it may be possible to refinance car loans if your credit is less than stellar. That said, it may make more sense to try to improve your credit before looking to refinance. If you are considering car refinance, think about what your goal is and how you can best achieve it.Is the goal of refinancing to make lower monthly payments? Is it to save money overall with a lower APR? Do you need to add or remove a co-borrower? If your credit has not improved since your initial loan, you may not be eligible for a lower APR. But if your ultimate goal is to reduce your monthly payments, changing the terms of your financing might still be an option. By extending the length of your loan, you will stretch out the payments over a longer period of time, therefore reducing your monthly payments.If your goal is to add or remove a co-borrower, you will need to refinance. You cannot make big changes like that to your loan, so it is necessary to refinance your car loan. Adding a co-borrower with good credit may qualify you for a better rate when you do refinance.The reality is, most lenders won't refinance with someone who has truly bad credit, so it's usually best to work on your personal finances and get your credit score up before applying. At Auto Approve, we can't offer many services for those with bad credit, but if you're on the fence and want to know if you'd be eligible for a better rate, you can always get a quote to find out. Getting a quote is free and doesn't require a credit check.How Do You Improve Your Credit to Refinance?In most cases, it will make sense to work on improving your credit before refinancing. Car refinance companies will be able to offer you better rates if your credit score has increased since your initial financing. As we mentioned before, people with the highest credit scores will more easily be approved for loans and credit applications, and will typically get the best interest rates and APRs. If you are interested in improving your credit score, try some of our tips below.Check Your Credit ReportWhen was the last time you checked your credit report? You should aim to check your credit report three times per year. You are allowed to check for free once a year at each of the three major credit reporting agencies, Equifax, Experian, and TransUnion. Be sure to take advantage of this and stay on top of your credit.When you get your report, review it thoroughly for errors or mistakes. There could be incorrect missed payments or other discrepancies that may be unfairly dragging down your credit. If you notice an error, report it immediately. The agencies have 30 days to look into your claim, so give yourself some time. Finding and correcting errors in your credit report may instantly improve your credit score.Work on Making Consistent PaymentsThe most influential and important part of your credit score is your payment history. Your payment history makes up 35% of your credit score. Do you always make your payments on time, or do they tend to be late? Are your payments full, or do they come up a bit short every now and then? Commit to being consistent with your payments and your score will increase. Cut back on eating out or think about canceling some unnecessary subscriptions to free up some room in your monthly budget. Six to eight months of consistency is usually enough to make a noticeable difference. Pay Down Existing DebtAnother key factor of your credit score is your amount owed, which makes up 30% of your credit score. This is also referred to as your credit utilization ratio (the amount of money you owe in relation to how much credit you have available to you). Try to pay a little extra every month (or a lot extra, if you are able). This extra money will go towards your principal and save you a good amount on interest payments. If you are able to pay this debt down through budgeting, it can greatly help your credit score. Avoid Opening New Lines of CreditResist any offers to open a new store credit card or another account. While these new credit lines don’t make huge impacts on your score, they can drag you down by ten or twenty points. That could be the difference between a good APR and a great APR.What To Do When Your Credit Has ImprovedOnce your credit score has improved, you will have a much better chance of securing better terms for your refinance. Contact multiple credit unions, traditional banks, and online lenders to start getting quotes and rates. You should aim to apply to 3-5 lenders to get some competitive rates. You can also look into car refinance companies that specialize in auto refinancing. The key to getting a good rate is shopping around. Be sure to apply to all of your lenders in the same fourteen day window. This will ensure that all of your hard inquiries will count as one hit on your credit report. At Auto Approve, we take care of this legwork for you. We know which lenders to reach out to and can handle the tedious paperwork so you don’t have to. While it may be possible to refinance a car with bad credit, it's usually more beneficial to work on improving your credit score beforehand to secure better terms.Working to get a healthy credit score is beneficial in a lot of ways and can help you to refinance and save money. At Auto Approve, we are here to help! Once your credit it in a good place, we can guide you through the process and handle the legwork so you don’t have to. And if you're not sure whether or not you're ready to refinance, getting a quote to see your options is free. So don’t wait to find out if you can start saving money!GET A QUOTE IN 60 SECONDS