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The Top Three Reasons You Should Refinance Your Car Loan

11/24/2021 23:00
Refinancing can be useful for many reasons, but the intent is always the same: save some money, either in the short term or in the long term (or both, right?) Whether you’re looking to save some cash in the long run, or just loosen up your day to day budget, car refinancing might be the right move for you. Here we discuss the top three reasons you should consider refinancing today.Reason #1: You Can Get a Lower Interest RateThere are a number of reasons why you might be able to secure a lower interest rate. And if this is the case, it is absolutely worth looking into vehicle refinancing. A lower interest rate can reduce how much you will end up paying in total on your car, as well as reduce your monthly payments. And who couldn’t use some extra cash every month? Let’s look at some reasons you might be able to secure a lower interest rate.Your Credit Has ImprovedYour credit score is the biggest factor in determining an interest rate. Credit scores help lenders to gauge how likely you are to repay the loan they are giving you. Let’s look at how credit scores are calculated, and how changes in your finances affect your credit score.35% Credit History (On time, consistent payments)30% Credit Utilization Score (Your total debts divided by the total credit available to you)15% Credit History Length (The age of your accounts)10% Credit Mix (How diverse is your credit portfolio)10% New Credit (New accounts and credit inquiries)A change in any of these areas can result in a change in your credit score. Say it has been two years since you took out your original loan. Since then, you have made every single payment, not only for your auto loan but for your mortgage and credit cards. You made a budget and stuck to it, and it paid off. This can offer a major boost to your credit since credit history accounts for 35% of your score. Maybe in those two years you also paid down your credit card debt significantly and reduced your credit utilization score from 50% to 25%. This shows financial maturity and makes you a very desirable loan candidate. An improvement to your credit score can translate to saving hundreds if not thousands of dollars. So what is a good credit score to refinance? A good credit score is considered to be 670 and above. As long as your score is better now than it was when you originally took out your loan, it is worth looking into.Check your credit score (it’s free to do once a year from each of the three agencies, which means you can check for free three times each year). If you have noticed an increased score, contact Auto Approve and let’s get the ball rolling on refinancing. *Pro Tip: When you get your credit report, check for any inconsistencies. Be thorough when you are reviewing, and report any issues to the credit agency. Catching any mistakes can have huge effects on your credit score!Interest Rates Are DownThe economy dictates how interest rates are calculated. Interest rates are set at the federal level by the Federal Open Market Committee (FOMC). If the economy needs a boost, the Committee will lower interest rates to encourage spending. In these unpredictable COVID times, interest rates have been lowered to encourage people to buy.Your Original Loan Had Unfavorable TermsIt’s happened to a lot of us; we go in to take a look at something and before we know it we are signing on the dotted line. Maybe you just wanted to see how that new SUV looked in person, or you were just hoping to take a quick test drive and get a feel for how that new truck drives. If this is how you got roped into your original car loan, refinancing might be an excellent idea. Dealerships have famously high interest rates and notoriously smooth salesmen. It is easy to get talked into a loan without shopping around and comparing rates. If this has happened to you, there is a good chance you are overpaying on your car loan. Vehicle refinancing can help you pay off your unfavorable loan and start over with a better, more reasonable loan. At Auto Approve we don’t have any smooth-talking salespeople (don’t tell our team we said that though). We are just really passionate about saving you money.Reason #2: You Want to Change Your Monthly PaymentsVehicle refinancing is a great way to change your monthly payments. If things have been especially tight lately, there are two ways that you can get some much needed breathing room.Refinance to a Lower Interest RateIf your credit score has improved, interest rates have gone down industry-wide, or your original loan had a high rate, there is a good chance you can refinance to a lower interest rate. This will ultimately reduce your monthly payments if you keep a similar payment schedule.Lengthen Your Payment PeriodA great way to reduce your monthly payments is to lengthen your payment period. When you refinance, you may have the option to pick 24, 26, or 48 month repayment periods. The longer your payment period is, the more spread out the total cost of the loan will be, which means your monthly payments will ultimately be less. If your interest rate isn’t much lower you may end up paying a bit more in the long run interest rates, so you will need to decide if the extra breathing room is worth the possible long term cost. Shorten Your Payment PeriodIf your financial situation has loosened up since you took out your original loan, shortening your payment period might be a good move to save some money in the long run. The shorter your payment periods are, the less time you will be paying interest on the loan. This can add up to saving big bucks when your loan is over. Your monthly payments are likely to be a bit higher, but if you are in a comfortable position it might be a good move to pay your loan off more quickly. And if you are able to secure a lower interest rate at the same time, that’s even more money in your pocket.*Pro Tip: Doing your research and running the numbers is the most important thing you can do when considering refinancing. Make a spreadsheet and use an amortization sheet to help you determine your various payments based on different payment periods. This will let you see how much you will be saving (and then decide if it’s worth it).Reason #3: You Want to Add or Remove a CosignerIf you want to add or remove a cosigner to your auto loan, you will need to refinance your car.Adding a CosignerIf you are having trouble each month making your loan payments, adding a cosigner might be beneficial to you. If they have a good credit score and payment history, they will likely qualify for a better interest rate. In order to add a cosigner, you must go through the vehicle refinancing process. When you refinance with a cosigner, lenders take the following considerations into account:Your cosigner’s credit scoreYour cosigner’s payment historyYour cosigner’s incomeYour cosigner’s backgroundYour cosigner’s consent to be financially liablePro Tip: It can be difficult to ask someone to cosign on a loan as it is a huge liability. The key to successfully cosigning is to communicate openly and honestly with your cosigner. Check in with them regularly to assure them that you are making consistent, prompt, and full payments. Give them access to any necessary documents and keep them in the loop.Removing a CosignerSimilarly, if you are no longer interested in having someone else’s name on your loan, you will need to refinance to get them removed from the loan. Make absolutely sure that you are comfortable taking on the responsibility by yourself before you remove your cosigner. Consider the following:Has your credit score improved enough to support this and give you a good interest rate?Is your cash flow good enough to support consistent, full, and on-time payments?Does your current loan have prepayment fees? Are these fees high enough to negate any benefits of refinancing?How much time left is in your current loan? If there are less than two years left on the loan, it might not be beneficial to refinance, and it might make more sense to leave the loan as is until it is paid off. On the other hand, if your loan is less than a year old it might be worthwhile to wait a bit. Waiting a year after your original lease to refinance will help your credit score to bounce back after taking out the initial loan.Those are the top three reasons that you should think about refinancing today.Have we convinced you that car refinancing might be a fantastic and worthwhile idea? Great! Wondering how to refinance a car loan? Get started with a free quote from Auto Approve today–it only takes a few minutes, so you have nothing to lose!GET A QUOTE IN 60 SECONDS
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How to Make Sure You Get the Best Car Refinance Rates

11/21/2021 23:00
You’ve done your research and you’ve decided that it’s definitely time for you to refinance your vehicle. Maybe your expenses every month are becoming a bit too high, or your credit has significantly improved in the past year or two. Either way you’re sold; auto refinance is for you. So how do you make sure you can get the best car refinance rate?Like so much with refinancing, the more you know the better off you will be. Some diligent research and proactive measures can help you secure the best refinance rates around.In this article we will discuss the difference between interest rates and APR, what lenders are looking at when determining rates, and what you can do to get the best car refinance rate possible. APR vs Interest RatesIf you’ve been looking around at car refinancing, you have probably come across the terms APR and interest rate. But what is the difference between APR and interest rate?Interest rate is the cost you pay each year to borrow money, expressed as a percentage. The APR, which stands for Annual Percentage Rate, is the interest rate plus any other fees associated with the loan. This includes any loan fees or interest that accumulates before your first payment.Your APR is actually a much better gauge of what a loan will cost, as opposed to an interest rate. All lenders are required by the federal Truth in Lending Act (TILA) to disclose what the APR. This is the number that you want to compare when looking for the best refinancing rates.What Do Lenders Look at When Determining Your RatesInterest rates, which combined with additional fees make up the APRs, are determined by both market factors and personal finance factors. Market FactorsRefinance rates depend in part on how the economy is performing. Interest rates are set by the Federal Open Market Committee (FOMC). Lowering interest rates is intended to encourage spending if they decide that spending needs to be encouraged. After an unprecedented 2020-2021 economic season, interest rates are currently at historic lows. This is not expected to last for too long however, and many economists think that as the months go on the interest rates may start to steadily increase. Personal Finance Factors and The Four C’s of CreditWhen you apply for credit, lenders will look at what is called the four c’s of credit. These are the considerations they will take when deciding to approve or reject your loan. They will also help dictate what your APR should be. The four c’s of credit are capacity, character, collateral, and capital. Let’s explore these terms.Capacity. This refers to your ability to repay the loan. What is your income? Is it a steady job that you have had for awhile? What are your other debts? These all contribute to your capacity to repay the loanCollateral. This refers to what you have that could repay the loan. In the case of a secured auto loan, your car would serve as collateral.Capital. This refers to how much you are worth (monetarily speaking, don’t take this to heart too much). What are your other assets? Do you have a mortgage, a savings account, or another car? All of this gives a snapshot to lenders and proves that you can manage your finances and have funds, in addition to your income, to pay you debt.Credit. This refers specifically to your credit score and history. We will look at how your credit score is determined in the next section. Your Credit Score and HistoryYour credit score is the most important factor in your refinance rate. While there is no magic credit score to refinance, the higher your score is, the better rate you will secure. To ensure you can secure the best rate possible, look at the following factors: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 score. 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.What Can You Do to Secure the Best Refinancing Rates?Get Your Credit Report and Review for ErrorsContact one, or all three, of the credit bureaus (Equifax, Experian, and TransUnion) and get your free credit report. You can get your report from each agency for free once per year. Review your report thoroughly and look at the following:The date you opened any credit accounts or took out any loans. Make sure all dates are accurate.The current balance on each account. Have your records handy to cross reference.Your payment history. Be sure that you have not been reported inaccurately for a late or missed payment.The credit limits and total loan amounts.Any bankruptcies or tax liens.Your identifying information. This includes your name, address, and Social Security number. If you notice any inconsistencies with your report, you can contest the information and report it. Bureaus have 30 days to respond, so it may take some time to get a correct and accurate report. It is important to follow through however as the impact can be drastic.Keep Your Credit Balances Below 30%This is a simple way to lower your credit utilization ratio, which makes up 30% of your credit score. The highest credit scores often use less than 7% of their available credit. This will quickly improve your credit score and as soon as it is reported for the month, you will see the increase on your credit score.Request Higher Credit LimitsContact your credit cards and see if you are eligible for higher limits. This will also help lower your credit utilization ratio, ultimately increasing your credit score. This will help your score very quickly, as soon as it is reported to the credit agencies.Keep Using Consumer CreditWhen trying to increase your credit score, it may be tempting to stop using credit cards altogether to avoid accumulating more debt. It is better for your score to keep using your credit cards to make small purchases that you can pay off. If you can consistently pay off your monthly balances, it will improve your credit and make you a more desirable loan candidate.Make Your Payments On TimeKeep making on time payments to keep your credit score in good standing. Missed payments can quickly ding your score.Become an Authorized User on Another Person’s AccountThis is a quick and easy way to increase your credit score, especially if you do not have a long credit history. If a relative or good friend has an account that is in good standing and has a high credit limit, adding yourself as an authorized user will increase your credit. You don’t even need to use their credit card, you simply benefit from their good credit.Use a Secured CardA secured card is a type of credit card that is backed by cash deposits. This is especially helpful for people who do not have a long credit history but need to establish one. It is used like a normal credit card, and if you consistently make on time payments it will improve your credit score.Shop Around and CompareDoing your homework is incredibly important when it comes to securing the best refinancing rates. This is where Auto Approve can swoop in and help you compare. The best refinance loans will have competitive APRs and low minimum loan amounts. Looking for a lender with a history of high customer satisfaction rating that is transparent and reliable is also important. The most important thing you can do to secure a good auto refinance rate is to get and maintain good credit, and then shop around and compare for the best rates.Once you have a healthy credit score, Auto Approve can help you with the next steps of shopping around, applying, and comparing the rates and terms. We are currently finding rates as low as 2.25%, and we would love nothing more than to pass these savings right on to you! And don’t worry, we never tack on additional fees to your rates. Contact us today to see how we can help you refinance your vehicle!GET A QUOTE IN 60 SECONDS
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Can I Add Another Person to My Car Loan?

11/19/2021 23:00
Refinancing a car loan is when you replace one car loan with another loan. The terms of your loan can change, since you are essentially starting over. This can often mean adding or removing a cosigner from your policy. If your situation has changed and you need a little help with monthly payments, or you could benefit from your friend’s excellent credit, refinancing with a cosigner might be a good idea. On the other hand, if you are looking to release your friend from that huge favor they did a few years ago when they cosigned for you, refinancing your vehicle might be a good way to remove them from the loan.Here we will go over how to keep, remove, and add a cosigner to your car loan when you refinance.What is a Cosigner?So what exactly is a cosigner? A cosigner is a person who can sign onto a loan and be obligated to pay back the loan should the borrower have difficulties making on-time payments. They assume the same financial risk as the borrower. Having a cosigner with good credit can be beneficial in securing a lower APR and getting better auto loan deals.How to Keep or Add a CosignerYou originally cosigned with a good friend because you needed help with the payments (and needed an extra boost from their credit score). Rates are low now and you could use the lower car loan payments every month, so you decide you want to refinance your loan. Things are going well, and your credit hasn’t improved quite enough for you to commit to the loan entirely. Because of this, you would like to keep them on as a cosigner. Or maybe you originally took out your loan and it is way too much to keep up on every month. You are drowning in monthly payments, and you know refinancing will lower your monthly car loan payments and alleviate this. But your credit has taken a hit recently, and you know you aren’t getting the best rates as a result. Adding a cosigner can help you secure a better rate and more favorable terms. With either of these situations, you need to know how to refinance a car with a cosigner. The good news is you can easily keep or add a cosigner when you refinance. Your cosigner will simply have to meet the lender’s requirements. Here are the most common requirements to be added as a cosigner:A Good (or Excellent) Credit ScoreGreat credit is the first requirement of cosigning a loan. Think of your cosigner as a safety net; should something happen to you financially, the lender is assured that there is a backup plan for payments being made on-time. A good credit score is an indication of how strong of a security net you have.Credit scores are based on payment history, amounts owed (known as credit utilization), credit history length, credit mix, and new credit. A cosigner is only beneficial if they have good credit. A score of 670 and above is considered good, but the higher their credit score is the more helpful it will be to you.A Good Payment HistoryDoes your cosigner have a good history of on-time payments? Payment histories show lenders how people handle their debts. If you have a history of consistent payments, you are less of a risk to lenders. A Qualifying IncomeDoes your cosigner have a steady income? Their income needs to show that they can pay back the loan on your behalf if you are unable. Desire to CosignDo they want to help you out in this way? Becoming a cosigner comes with a lot of liability. Once they sign on the dotted line, they are responsible for the debt if you should default. A Clean Background CheckLenders will often use background checks to determine the liability of a cosigner. They will specifically look for financial issues, including evictions, repossessions, and financial fraud.How to Remove a CosignerNow let’s look at how to remove a cosigner from a car loan. Has your credit improved significantly since your original loan, and you no longer need the help of another person? Maybe you want to reduce the risk for a loved one who was helping you out in a time of need. Whatever the reason, you are ready to remove them as cosigner.There are three ways to remove a cosigner from your loan, but refinancing is certainly the most popular.Try to Remove them From Your Existing PolicyRead your contract carefully and closely and see if there are any provisions that will allow the cosigner to be released from responsibility. This is very unlikely, as cosigning is put in place specifically to make it difficult for one person to back out. But it is worthwhile to look through your contract if you are thinking about it.Pay Off the LoanIf you pay off the loan entirely, you will remove the cosigner automatically. This may not be a practical solution however if you are not in the position to do so. Refinance and Remove the CosignerThis is the most popular and easiest way to remove a cosigner. Since refinancing is replacing one loan with another, you are essentially paying off the original loan and starting over. Before you decide to do this, check on the following:Your Credit Score. Is your score in good or excellent standing? If it is still not in good standing, expect to pay higher interest rates if you drop your cosigner.Your Cash Flow. Are you able to make the monthly payments every month? Do not remove your cosigner if things will still be very tight. Falling behind on payments will be detrimental to your credit and can result in you losing your car.Your Current Loan. Are there prepayment penalties if you pay off your loan?  If the penalties are high, it will negate any savings from refinancing. Is there enough time remaining on your loan to make refinancing worth it? If you are near the end of your loan term it is likely not worthwhile to refinance.Your Car’s Condition. Is your car retaining value and eligible to be refinanced? If you owe more on your car than it is worth, you will most likely not be eligible to refinance.And that’s everything you need to know about adding, keeping, and removing a cosigner from an auto loan. If any of the above situations were relatable to you, it might be a good time to consider vehicle refinancing. At Auto Approve we can help you compare quotes from multiple lenders and help you refinance today. With an A+ rating from the Better Business Bureau, you know you’re in good hands with our team.GET A QUOTE IN 60 SECONDS
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How Does Auto Refinancing Affect Your Credit Score?

11/18/2021 23:00
Are you thinking about refinancing your auto loan, but unsure of what will happen to your credit score? Does refinancing hurt your credit? While credit scores can seem confusing and complicated, it is important to predict how certain financial moves will affect your credit history. Here we will discuss how credit scores are calculated and go over the impact of refinancing. Auto Refinancing will cause a slight dip in your credit score, but it can still be worthwhile and might actually help your credit in the long run.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 (and who doesn’t want that?). 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 History. This 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 Owed. The 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 Length. The 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 Mix. Having 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 Credit. The 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?Using the above factors, credit bureaus calculate a credit score for every person with a credit history. 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 APRs.How Will Vehicle Refinancing Affect Your Credit ScoreRefinancing will affect two of the 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. BUT 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.How to Prepare and Reduce Impact on Your Credit ScoreTo reduce the impact that vehicle refinancing will have on your credit, be sure to do your research and understand how credit scores are calculated. Complete 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 window. Is Refinancing Worth It?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. Should any of the following apply to you, it might be worth looking into refinancing: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.Whether 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 wondering how to get approved for auto refinance, Auto Approve can help you compare quotes so you can start saving money today. Contact us today to get the ball rolling!GET A QUOTE IN 60 SECONDS
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What is a Good Rate for a Motorcycle Loan?

11/16/2021 23:00
Always dreamed of owning a motorcycle, but never been able to pull together the cash to make that dream a reality? Recently bought a hog and wondering if the rate you got was reasonable? Whatever you're looking for, we're here to give you all the answers to your questions about financing and getting a good rate on your motorcycle loan! (Also, does calling it a hog make us sound cool? Please don't ruin this for us.)While buying a motorcycle can be less of an investment than buying a new car, it can still be a significant purchase. New Harley Davidsons start at $10,000, but easily climb into the $20,000 range. So if you really want to get on the open road, but don’t quite have the money, a motorcycle loan might be your answer.Here's everything you need to know about motorcycle loans and financing ratesThe Three Ways to Finance Your MotorcycleIf you don’t have the money in your bank account to buy the motorcycle you’ve been eyeing at the local dealership, there are three different options for financing:Manufacturer FinancingSome motorcycle companies, such as Harley Davidson and BMW, offer financing. And there are some pros to manufacturer financing:You can get financing on both new and used inventory.You can add necessary gear and accessories to the loan amount, such as helmets and protective gear.It's convenient – you can get your motorcycle and financing set up in one day with little hassle.Dealers sometimes run specials to encourage sales, so if you have good timing you may be able to get a nice rebate or decent APR on your new chopper.While there are some good benefits to manufacturer financing, there are also some negatives. Here are the cons to this type of financing:Dealerships have notoriously high APRs. It is important to shop around beforehand to know if you are getting a good deal or not.There are sometimes limitations on what you can finance. Not all models are eligible for financing, and oftentimes the advertised low APRs only apply to certain motorcycles.Manufacturer loans are secured. This means if you fall behind on payments, they can take your motorcycle as collateral. Personal LoanIt is possible to secure financing through a personal loan. A personal loan is an unsecured loan that you can take out through a bank, credit union, or an online lender. Here are the pros of using a personal loan to finance a motorcycle:These loans are unsecured, meaning that should you default, your motorcycle will not be taken as collateral.There are often no origination or application fees.There is often no prepayment penalty if you pay back early.Securing a personal loan can often be a bit more difficult because it is unsecured. Here are some of the cons:You need to be a member if you're financing through a credit union (credit unions often have the best rates for personal loans).You must have excellent credit to be eligible.Rates can be high, as they are unsecured.You may be required to apply in person.A personal loan may be a good option for some, but it does require a great credit score and strong credit history. Motorcycle LoanThe third option for financing a motorcycle is to get a motorcycle loan. Motorcycle loans are offered through banks, credit unions, and some online lenders. While similar to auto loans, they are not interchangeable and you may find that the lender financing your car does not offer motorcycle loans. Motorcycle loans are your best bet to find a lower rate, but this is dictated largely by your credit score and financial history. Additionally, there are often limitations on these loans (for instance, you may not be allowed to buy a used motorcycle, only a new bike). Since motorcycle loans are usually the best bet for getting a good rate, let’s explore them a bit more.Are Motorcycle Loans Different than Car Loans?With both motorcycle and car loans, you are making payments on a vehicle that will act as collateral in case you default on the loan. They both have a similar application process, and the rate for both types of loans are largely dependent on your credit score and financial history. The main difference between these types of loans are the rates and availability.Why Do Motorcycle Loans Have a Higher APR than Traditional Auto Loans?Motorcycle loans tend to have a higher APR for a number of reasons. First off, they are considered recreational vehicles, while cars are considered to be more of a necessity. Motorcycles require more repairs and the motorcycle depreciation rate is higher than a car depreciation rate. Motorcycle crash rates are also higher. All of these factors add up and make for a higher risk loan, therefore lenders charge a higher APR.What are the Requirements for a Motorcycle LoanRequirements for a motorcycle loan are similar to requirements for an auto loan. The lender will look at the following information when choosing whether or not to provide financing:Credit ScoreDo you have a good credit score? Your credit score is especially important when it comes to financing a motorcycle. Because it is a riskier loan, there is a higher threshold of financial stability. According to Equifax, the following credit tier characterize credit scores:800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor creditTo secure a motorcycle loan, you will need a good credit score (670 or above), but the best rates will be reserved for those with very good to excellent credit (740 or above).Credit HistoryHave you had other loans, such as an auto loan or a mortgage? Do you make on time payments? Do you have a history of repossession or bankruptcy? Lenders will ask all of these questions when reviewing your credit history to determine whether or not you are a high risk candidate for a motorcycle loan.Debt-to-Income RatioDo you have a high debt-to-income ratio? Mortgages, rents, auto loans, and other personal loans are all considered debts. If the ratio of your debts to your income is high, you are a less desirable candidate for a motorcycle loan. If your debt-to-income ratio is low, this means you are more likely to make full, on-time payments and are therefore a more desirable loan candidate.Down PaymentHow much of your own money are you able to put down on your motorcycle? If you are able to put down a higher payment up front, it shows the lender that you are a serious applicant and more financially stable than someone who does not have any money for a down payment. Condition of the MotorcycleIs the motorcycle new or is it used? If it is new, it is more reliable with less risk of it breaking down. That being said, new motorcycles tend to be much more expensive. The lenders will look at all of this information when determining a rate.Price and Value of the MotorcycleHow much are you paying for the motorcycle, and how much is it worth? The price you are paying compared to the value found on Kelley Blue Book will tell the lender whether or not you are getting a good deal on your motorcycle. This will also factor into the rate of your motorcycle loan.What is a Good Rate for a Motorcycle LoanRates for motorcycle loans vary greatly based on your personal situation. If you have excellent credit, a strong financial history, and can put down an up front payment, you can find rates as low as 3.5% APR. It is important to remember that what is a “good” rate for you might be different than what is considered a “good” rate for someone else. The high risk associated with motorcycles compounded with less than perfect credit can drive your APR up pretty fast. And if you're not happy with your rate, we can help. At Auto Approve, we're committed to finding you the best rate possible for your motorcycle loan. We work as your advocate to track down and compare all available rates and terms to ensure that you are getting the most bang for your buck. Can I Refinance a Motorcycle Loan?Yes! If your credit score has improved since your initial loan, interest rates have gone down, or you just got a bad rate on a manufacturer loan, you can refinance to more favorable terms. If you are wondering how to refinance a motorcycle, Auto Approve can help make it happen. What Not to DoIf you cannot get approved for a motorcycle loan, personal loan, or manufacturer financing, you should wait to purchase your new motorcycle. Avoid the temptation to buy the bike with your credit card. If your credit limit is high enough, you might think this is an easy option, but the high interest rates and penalties can have disastrous results if you fall behind. It’s best to work on building your credit and reapplying when your situation has improved.Financing a motorcycle has stricter requirements than financing a car, but at Auto Approve we can help you find the best motorcycle loan rates available. If you're interested in refinancing your motorcycle loan, contact us today to find your best rate!GET A QUOTE IN 60 SECONDS
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How Does Car Refinancing Work?

11/16/2021 23:00
The word refinancing is thrown around all the time these days. From mortgage refinancing to student loan refinancing, everyone is buzzing with talks of low interest rates. But what exactly is refinancing, and how does car refinancing work? In this article we discuss what refinancing is, how car refinancing works, and discuss how it may be beneficial for you to do right now.What is a Car Loan?A car loan is a secured loan that can help you finance a new or used car. A car loan works in a similar way to other types of loans. A financial institution will pay for your car and you will repay them in monthly installments with an additional fee (interest). Your car acts as collateral and, if for any reason you cannot repay the lender, your car will be taken away. It's because these loans have this collateral that they're considered "secured."What is Refinancing?Simply put, refinancing is paying off an existing loan with a new loan, ideally a loan that has better terms. Refinancing a car to better terms often results in saving money, either in the long run by reducing the payment period or interest rate, or in the short term by reducing monthly payments.What are the Benefits of Refinancing?Save Money with a Lower Interest Rate You may be able to secure a lower interest rate, either because of the current economic climate, or because your own personal financial situation has improved. This is the primary motivator for people to refinance. By lowering your interest rate, you are lowering your monthly payments and will end up saving money over the course of the loan.Save Money with a Shorter Payment Period When you refinance, you may be able to change the terms of your payment period and shorten the period. This can save you money overall, as the sooner you pay back the loan, the less interest you will ultimately pay.Reduce Your Monthly Payments with a Longer Payment Period If money is a bit tight for one reason or another, car refinancing may allow you to lengthen your payment period. This will allow you to pay off the loan over a longer amount of time, reducing your monthly payments significantly. You will end up paying a bit more over the length of the loan because you will be paying interest for a longer period of time, but it can give you breathing room if you need it.When Should You Refinance?When Interest Rates Are LowRefinancing is all about striking when the iron is hot. And by that we mean when the interest rates are hot. Interest rates are adjusted based on how the economy is performing. If the economy is not performing well, or is anticipated to not perform well, banks will lower their interest rates to encourage spending. If interest rates are lower than when you first took out your auto loan, it may be a good time to consider refinancing. Rates are currently very low, so there is a good chance you can get a lower APR now than you could previously.When Your Credit Score Has ImprovedInterest rates are largely dependent on the finances of the applicant. Your credit score is one of the most important factors in securing an auto loan with good terms. Credit scores are generally categorized by the below parameters:800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor creditIf your score has increased from good to very good (670 to 740), or from very good to excellent (740 to 800), it could be a great time to consider refinancing. The most favorable rates and terms are given to those with very good and excellent credit. Even if your score has increased within your bracket, but you haven’t crossed into a better category, it still might be worth getting a few quotes to see if you can get a better rate. When Your Income Has Decreased or Your Expenses Have IncreasedIf money is tight due to a loss of income or an increase in other monthly expenses, refinancing might be a good option to give your wallet some breathing room. If you can lengthen your payment period, you can pay off the loan over a longer amount of time, reducing your monthly payments significantly. When Should You Hold Off On Refinancing?When Your Existing Loan Has Prepayment PenaltiesSome loans build in prepayment penalties to offset the lost interest that comes with paying a loan off early. These penalties can be quite high, so it is important to read the terms of your loan and decide if the savings from refinancing will outweigh the fees from prepayment. If you are unsure, call your lender directly to find out how much it will cost.When You Need a High Credit Score for Another ApplicationWhenever you apply for a loan or credit card there is a credit check, and hard credit checks (as opposed to soft checks) and new lines of credit can negatively affect your credit score for about a year.This is because how new your credit is affects your score – but, as long as you maintain a good history of paying on time, this new credit will actually help your score in the long run. And, fortunately, there's a fourteen day window allowed by the big three credit bureaus that allows for all credit inquiries in that span to count as one credit hit.All that said, if you're applying for a mortgage or starting a new lease, it might be wise to wait until after that is settled to refinance your vehicle.When The Timing of Your Loan Isn’t RightWhile you can technically refinance at any time during the life of your loan, there are certain times where it will not make sense or be beneficial to refinance. You’ve had your existing loan for less than six months. It takes some time for your credit score to bounce back after taking out a loan, so waiting at least six months will be helpful if you hope to get a better interest rate than before. If this is your first loan, it is recommended to wait at least a year to prove that you have a history of on time payments.You have less than two years left on your loan. Car loans accrue interest over time. Because of amortization, your earlier payments pay off more interest than your later payments. As you near the end of your loan, you are paying less and less on interest and more and more on principle. The longer you wait to refinance, the less beneficial it will be to do so.How Do You Refinance a Car?If it seems like car refinancing might be a good idea for you, let’s go over how to start the process of refinancing. It's a hassle-free process (especially when you use Auto Approve!) and can save you money in the short and long term.Do Your ResearchMake sure you are as prepared as possible. Request a credit report, which you can do once per year for free, and make sure your credit score is good. Check that everything is accurate on your report. You can petition the credit bureau if there are any inconsistencies or errors. Look at your current loan contract and make sure you are aware of any penalties for which you may be responsible. Call your lender directly if you have any questions or want to review any of the fine print.Apply to a Few Different LendersThe application process is similar to your original car loan application. You will need the following to get started: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. Compare Rates After all of your applications are submitted, you should start hearing back with different car loan APRs and terms. Compare all of your offers and choose the one that gives you the best rate and makes the most sense for your personal situation. When you use Auto Approve for this process, one of our agents will talk you through the best options and help make sure you understand your new contract completely. (Oh, and when you refinance with Auto Approve, there are no mark-ups, so you're actually getting the best rate available every time!)Sign and Start Saving MoneyOnce you have picked the best car refinancing option, sign on the dotted line and start seeing the benefits of refinancing immediately.Refinancing your car loan is a simple process that can save you a boatload of money.Auto Approve can make this process even easier and simpler for you! Just fill out some basic information and we can help you start comparing rates today. We never mark up your rates, because we're passionate about passing the savings right on to you. So if you're thinking, “Boy howdy, I better get to refinancing now!,” contact us today, Cowboy! (Seriously, what are you waiting for?)GET A QUOTE IN 60 SECONDS
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What Is Gap Insurance And How Does It Work?

11/12/2021 23:00
Gap insurance (Guaranteed Asset Protection) is optional insurance that kicks in if your car is totaled or stolen. It essentially covers the “gap” between what you still owe on the car and the depreciated value of the car. Let’s look a little closer at how this type of insurance works, and when you should consider getting it.Here’s everything you need to know about gap insurance and when it is worthwhile to have.If you have a car loan, it is possible that the car may be valued at less than you owe on it. This is less than ideal, but it happens often enough with vehicle loans. This becomes a major problem if something drastic happens to your car. If your car is stolen or totaled and the insurance company only pays out what the car is valued at, it might not cover the amount that you have left on your loan. How Does Gap Insurance Work?Gap insurance kicks in when there is a gap between what insurance will pay and what you still owe on the car. Say you take out a loan for $20,000 on your new car, and a few months later your car is totaled while it is parked outside your house. You file a claim with your insurance company, and they agree to pay $17,000. The $3,000 difference is ultimately your responsibility, even though the situation was completely out of your control. Gap insurance ultimately works in conjunction with comprehensive and collision insurance to minimize or eliminate your out of pocket expenses.Do I Need Gap Insurance?Gap insurance is not technically required, but that doesn’t mean you shouldn’t consider it. Let’s look at a few different types of insurance and when they are required:Liability Insurance. This insurance is required by almost every state in the United States (excluding New Hampshire). It is composed of three parts: bodily injury coverage per person, bodily injury coverage per accident, and property damage coverage per accident. This covers any damage you may cause to another driver, their passengers, or their property, including their car.Comprehensive Insurance. This covers the cost of damages to your vehicle if there is a non-crash accident, such as weather damage or theft. Comprehensive insurance also covers damage that occurs if you hit an animal. Collision Insurance. This covers damages to your vehicle if you hit or are hit by another vehicle.If your car is financed, you may be required to get all three types of insurance. Even so, it is possible that this may not cover all of the damages, and you could still owe money on your car even if it is totaled.How Do I Decide If I Need Gap Insurance?If your car is not financed, you do not need gap insurance whatsoever. If your car is financed, it depends largely on the expected depreciation of your car. It is important to remember that cars depreciate rather quickly, losing about 20% of their value in the first year alone. It is always worth checking Edmunds or Kelley Blue Book to see what your car is worth. Here are some factors that might help you decide if gap insurance is necessary: You put less than 20% as down payment on your car. This makes you more likely to end up with negative equity as soon as you leave the dealership. Your car depreciates the minute you leave the dealership, so if you only put down a low down payment, you might immediately owe more than the car is worthYour car is a lease. Some leases require gap insurance in addition to collision, comprehensive, and liability.You drive a lot compared to the average person in your area. This will cause your particular car to depreciate faster. Your car model has a tendency to depreciate fast. Some cars simply lose value faster than other cars, while some cars hold their value extremely well. Gap coverage might be worthwhile if your car model doesn’t hold its value particularly well.Your car loan payment period is long. If your loan is 5 years or longer, there is a higher chance that your loan balance will exceed your car’s market value. Gap insurance can protect you from this depreciation.How Much Does Gap Insurance Cost?Like everything, the cost of gap insurance can vary greatly between insurance companies. If you go through your current provider, you can expect to pay a yearly flat fee of $500 to $700 for the coverage. If you finance through a credit union, you can expect a monthly add on of $20-$40. The following variables will affect the cost of gap insurance:Where you live.Your age.Previous claims history.Actual value of your car and total amount you owe.If your insurance company does not offer gap insurance, you can purchase it as a stand alone policy from another provider. At AutoApprove, we work with lenders to get the best rates on gap insurance possible, usually around $14 per month. As far as insurance coverage goes, it offers a great return of investment should you ever need it to kick in.Is Gap Insurance Really Worth It?You will need to do the math to determine if gap insurance is worth the investment.  First, go online to determine how much your car is worth. Use sites such as Kelley Blue Book and Edmunds to get a value for your make and model. It is best to find an end of year value for each year of your loan.Take a look at your loan terms. See how much you will owe each year, and compare this to what your car will be worth at the end of each corresponding year.Calculate how much gap insurance will cost for each year.Look at the difference in your car’s value and what you owe at the end of each year. Based on this, determine how much gap insurance will save you in the event of a disaster. If there’s a good chance your car will depreciate faster than you will pay it off, you should strongly consider gap insurance. Gap insurance ultimately covers what collision and comprehensive insurance do not cover, and can protect you from depreciation.At AutoApprove, we know that gap insurance can make good sense based on how quickly cars tend to lose their value. We work closely with lenders and help you shop around for the rates and coverage that fit your needs most. So if gap insurance makes sense to you, contact us today to see how we can help.GET A QUOTE IN 60 SECONDS
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How to Get Out of a Car Lease Early

11/09/2021 23:00
There are a number of reasons why you might want to get out of your car lease early. Maybe you just lost your job, and the payments are too much to keep up on. Maybe the car isn’t as great as you hoped it would be, and it’s just not fitting your needs anymore. Or maybe, you want to be done with leasing and simply own the car outright. Whatever the reason, you have decided that you need to make a move and get out of your lease as soon as possible. So how do you do it?If you are wondering how to get out of a car lease early, these are the three main options: transfer the lease, return the car, or buy the car.Transfer the LeaseA very popular option to get out of a lease early is to transfer your lease to another person. Websites such as leasetrader.com and swapalease.com can help match you with someone looking to take over a lease. It is important to look at your lease agreement however, as not all leases permit a third party transfer. Furthermore, you must ensure that it is legal to do so in your state. The new lessee must also meet the lender’s requirements. If you are able to transfer the lease, you will most likely be held responsible if the third party stops making payments. You will also be required to pay any transfer fees, which can range from $500 to several thousands of dollars. It is common to offer incentives for people to take over your lease as well. An extra $500 to anyone willing to take over your lease might convince someone who is on the fence that taking over your lease is a good move. All of these costs add up for you however, so be sure to compare the costs between a lease transfer, early termination, and lease buyout.Return the CarThe simplest way to get out of a lease early is to terminate the lease agreement and return the car. This can also be the most costly option. When you terminate a lease early, you may be responsible for all or some of the following:Early Lease Termination FeeEarly lease termination fees vary widely from lease to lease. They are often based on a sliding scale, making it more burdensome to pay off the earlier you are in your lease. For example if you terminate your lease in the first year, you may be required to make three additional monthly payments, whereas if you terminate your lease in the second year you may only be required to make two additional payments. Review your lease agreement thoroughly to determine your responsibility.Remaining Payments on your VehicleYou may be required to pay all or some of the remaining payments on your vehicle. This is potentially the most expensive part of exiting your lease early. If you decide to terminate your lease with 18 months left on your contract and your monthly payments are $300, you may be on the hook for $5,400 in addition to the other fees associated with termination. Any Costs Related to ResaleThe lease agreement will often require you to pay a disposition fee, which covers any costs associated with reselling the car. This could include getting the car thoroughly washed and detailed, fixing any cosmetic dings, and performing any necessary maintenance. This can range from a few hundred to a few thousand dollars depending on the condition of your car. Taxes Associated with LeasingIf there are any additional taxes associated with the lease, you will be required to pay those. This will vary greatly state to state.Negative Equity Between Your Lease and the Current Market ValueNegative equity is when you owe more than something is worth. This is also referred to as being “upside-down” or “underwater”. When it comes to a lease, it means that your monthly payments are not paying down the balance of the lease faster than the car is depreciating. Your lease agreement might require you to pay some or all of this difference in the car’s value.Storage and Transportation of Your VehicleAny costs related to the physical removal and storage of your vehicle will be your responsibility to pay.As you can see, all of the lease termination fees often make this the most expensive and least practical way to get out of a lease early, but it is definitely the most straightforward. Buy the CarSometimes the most financially beneficial way to end a lease early is to buy the car from the lender. If you have the capital to do this outright, you can simply buy the car and pay for any associated fees. If you do not have that amount of cash on hand, you can opt for a car lease buyout loan. Here is how to buy your car from your lease agreement.Determining Your Car’s ValueEvery car lease has a residual value that is listed in the loan agreement. The residual value of a car is based on your car’s expected depreciation over the life of your loan and is predetermined by the leasing company. It is usually non-negotiable. This is the number that you are bound to should you choose to buy your car.It is important to also look at your car’s market value. This is based on the demand for your car, and will give you an idea of how much you can get if you resell the car. It is important to know what the market value is of your car to determine if it makes sense to purchase it. If the residual value of your car is $13,000, but the market value is $11,000, it would mean that you are paying $2,000 more than what your car is worth. Consider these values and determine if a car lease buyout makes sense for you. Maybe you want to keep the car for yourself and you are comfortable with paying for the residual value. Or maybe you want to resell the car, and you will still make money on the transaction based on the market value of the car. Other Considerations for Buying Out Your LeaseBuying your car from your lender can release you from fees that you might otherwise have to pay. Leases often include charges or penalties for the following:Excessive Mileage. Most leases have yearly mileage limits, and if you exceed that mileage amount, you can be paying huge penalties. These penalties can range from $.10 a mile to $.30 a mile, which can add up to several thousands of dollars if you drive a lot. Wear and Tear. When your car is turned in after your lease is over, it is subject to inspection. Dealers will charge you for any external dents, stains to the interior, and anything else they think will hurt resale value. These fees can vary greatly depending on the condition of your car.Disposition Fees. Dealers will usually charge you a disposition fee, which covers all costs associated with reselling your car. Think of all of these fees as money that can be put towards buying your car from your lease. If the fees add up to $3,000, it might make sense to take that $3,000 and use it to invest in the purchase. It is always a good idea to call your lender directly and find out exactly how much it will cost you to buy your car from your lease. Obtaining a Lease Buyout LoanIf you’ve done the math and determined that buying out your lease is the best way to terminate your lease early, you may need to obtain a lease buyout loan. Not all lenders offer this type of loan, but at AutoApprove we work closely with lenders that provide these loans and will work tirelessly to find you the best rate possible. To get a lease buyout loan, you will need to take the following steps:Call your existing lease company. First, find out how much it will cost to buy your car. Tell them you are looking to buy out your lease and see if they provide that service.Shop around for rates. At AutoApprove we can jump start this process for you and help you start comparing rates.Call your existing lease company, again. Give them a chance to beat any competing rates that you may have found.Sign the papers and notify your insurance company. Make sure all of the necessary papers are signed, and tell your insurance company about the new lender. Since you will no longer have a lease, you may be able to reduce your coverage and your monthly payments, as you will no longer be required to have high liability coverage.Keep it or sell it. Now that it’s yours, you can decide if it’s worth keeping it, or selling it and keeping the profit.It is not always easy to get out of a lease early, but there are options available to do so.The best option will depend largely on your financial situation, but it rarely makes sense to terminate the lease outright. Finding a third party lessee or securing a buyout loan will often be the most beneficial options. If you are interested in obtaining a car lease buyout loan, be sure to contact AutoApprove today to get more information.GET A QUOTE IN 60 SECONDS
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What is a Car Lease Buyout?

11/08/2021 23:00
Leasing a car is a very popular option for many these days. But what happens when you love your car, and you just can’t bear to say goodbye?When your car lease comes to an end, you typically have three options to choose from: lease trade in, lease turn in, and lease buyout. Here, we'll discuss your three options and help you decide if a car lease buyout is the right move for you.What is a car lease buyout and does it make sense for you?In short, a car lease buyout lets you buy your existing car from your lender.When your lease term comes to an end, you have three main options to consider. About three months before your lease end date, your lender should contact you to review your courses of action.Understanding Your OptionsLease Trade InA lease trade in is when you trade your old car in for a new car lease. In this case, you should determine your car’s value and compare it with the lease-end residual value that is listed in your lease contract. If the trade in value is higher (which is rare), you can use the difference to put a down payment on a new vehicle.In most cases, the residual value will be higher and it will make more sense to return the car and start a new lease.Lease Turn InA lease turn in is exactly that; you return your car to the dealer as is. You will have to look at your contract carefully and determine if you are responsible for any fees. An inspection will be performed when you trade in your car and you will be responsible for excessive wear and tear, any dents and dings on the exterior of the car, and any stains or tears on the car’s interior. Excessive mileage fees may also apply, which can add up fast.Lease BuyoutA lease buyout lets you buy your car directly from your lender. If the first two options are less than ideal, a lease buyout might be the right option for you. In most cases, you can buy your car lease at any point during your lease period. If you want to buy out your loan early, you will need to discuss this with your lender as it will affect the residual value of the car. It is often not financially beneficial to buy a lease out early. It is much more common to wait until the end of the lease period to broach the subject of a lease buyout.  How a Buyout WorksA car lease buyout is different than buying a new car. You already have knowledge of your car’s condition so you should have fewer concerns over the investment. The buyout loan amount will also be significantly less than buying a new car. Let’s look at what you should consider when deciding if a lease buyout is right for you.Valuing Your CarFirst and foremost, you should determine the value of your car. There are two main factors that you should consider:Residual Value. Your car’s residual value is listed in your existing loan contract. The residual value of a car is based on your car’s expected depreciation over the life of your loan and is predetermined by the leasing company. This number is usually non-negotiable.Market Value. The demand for your car will greatly affect the market value of your car. If it is a popular make and model, it will have a higher market value. Use websites such as Cars.com, Edmunds.com. Or Kelly Blue Book to determine the market value of your car.When you are buying out your lease, you are bound to the residual value of the car. It is important to know what the market value is of your car to determine if it makes sense to purchase it. If the residual value of your car is $16,000, but the market value is $13,000, it would mean that you are paying $3,000 more than what your car is actually worth. There is no rule on when exactly it is worthwhile to purchase your car, but if the residual value is within a few hundred dollars of the market value, it is probably a fair deal.Additional Buyout ConsiderationsIf you are happy with the residual value of your car, there are a few more factors to take into consideration.Excessive mileage. Have you exceeded the mileage amount allotted in your lease agreement? If so, you will be subject to per-mile penalty fees that can vary from $.10 to $.30 per mile. If you were consistently driving several thousand miles per year over your limit, that can add up to several thousand dollars. If you choose to buy your vehicle, you will not have to pay these fees, so this money can instead be put towards your buyout. Your car’s condition. Your car is subject to inspection when your lease period is up. You will be charged a fee if there is excessive damage, such as exterior dents and dings, interior tears and stains, or mechanical issues that the dealership considers beyond normal wear and tear. Disposition Fee. The disposition fee covers all costs associated with reselling your car, and can be a few hundred dollars. This pays for the dealership to clean and detail the car, and make any necessary repairs before reselling.Cost of maintenance. If you want to keep your car, it is important to do additional research to determine what your cost of maintenance will be in the next several years. If there are several expensive maintenance costs that will pop up, you will need to compare this cost with the savings from the other fees.How to Buyout Your LeaseYou’ve run the numbers and you think that buying out your lease makes the most sense and is your best option. What next?Call your existing leasing company. Get a comprehensive list of all costs associated with the buyout. Make sure this number includes sales tax, which can be a significant amount.Shop around for rates. Go online and look around at different rates. Not all lenders offer buyout loans, so you will have less options than when you originally financed your loan. It is also important to note that lease buyout loans are used car loans, which tend to have higher interest rates than new car loans. At Auto Approve, we work with lenders that do offer lease buyout loans, and can help you get the best rate available.Your rates will be based on prevailing interest rates in the industry as well as on your personal finances, just as your initial loan. Make sure you have all necessary documents for your loan application: Photo IDYour Vehicle’s InformationProof of Income and Financial HistoryProof of ResidenceProof of InsuranceHaving all necessary documents ready to go will help to streamline this process. Be sure to apply to all lenders within a fourteen day period. The credit bureaus allow all credit inquiries in a fourteen day period to count as one credit hit, so it will not adversely affect your credit score more than necessary.When the lenders respond with their offers, compare the rates and terms. At AutoApprove, we can help you shop around to compare rates and terms to find the best option for your buyout loan. Call Your Insurance CompanyYou will need to notify your insurance company of your new lender. This is also a good chance for you to review your insurance needs. On a leased vehicle, you are typically required to have high levels of liability coverage. You may decide that you do not need such a high level of coverage based on where you live or how much you drive, and you can opt for lower payments by reducing this coverage. Make Sure All of Your Paperwork Is In OrderTalk to your lender and be sure to visit your state’s motor vehicle department to transfer the title and make sure all of your paperwork is in order. Your lender should be able to guide you specifically through what steps you need to take. And when you work with Auto Approve, we handle the DMV paperwork for you!Ready to buy out your lease? Auto Approve can helpIf you have considered all of your end of lease options and determined a lease buyout is the right option for you, we're here to help you with the next steps so you can keep your car, hassle-free.At Auto Approve, we never mark up rates on car buyout loans or vehicle refinancing, so you know you're always getting your best possible rate. We pass all of the savings right on to you. We know car financing can be complicated and stressful, but we're here to streamline the process and save you as much money as possible.Check out our auto lease purchase options and get started today!GET A QUOTE IN 60 SECONDS
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When Can I Refinance My Car Loan?

11/07/2021 23:00
So, you have a car, you love it, but the interest rate... isn't so hot. You're probably wondering whether refinancing could help and, if so, when you can refinance.First, let's talk about vehicle refinancing.When you refinance a car, you are paying off your existing loan with a new loan that ideally has better terms. Just as you are able to obtain a vehicle loan whenever you would like, you are also able to refinance a vehicle loan whenever you would like. But there are many factors to consider when trying to determine the best time to refinance a car and whether or not it makes sense for you right now.Let's take a look.When can you refinance a car, and when is the best time to refinance?There are many factors to consider when it comes to refinancing. Here are some things to think about when determining if refinancing is a good idea for you right now.Your Existing LoanFirst and foremost, it's important to look at the terms of your existing auto loan.Sometimes, lenders will have prepayment penalties attached to the loan, so it is important to know what the penalties will be if you choose to refinance. If there are prepayment penalties, be sure to do the math to determine if the savings of refinancing will outweigh the downside.When determining the best time to refinance a car, it depends heavily on how long you have had your original loan and how many payments are remaining. Let's take a closer look at that.It’s the beginning of your auto loanWhile you can technically refinance immediately after you get your initial loan, it is generally better to wait a bit before refinancing your car.60-90 Days: This is the amount of time it typically takes for the title on your car to transfer. You need to wait until all the paperwork is finalized to refinance, so it's actually unlikely you'd even be able to refinance in this first period of time.Up to six months: It takes some time for your credit score to bounce back after the hard inquiry from your first loan. If you have fantastic credit, this might not be an issue. But, typically, waiting at least six months will yield more beneficial refinancing options. If you are a first time car loan borrower, it is recommended that you wait a year before refinancing your car. This will prove an on-time payment history and make you a more desirable candidate and qualify you for better loan terms and rates.It’s towards the end of your auto loanTo talk about why this matters, we need to get into the nitty-gritty of loans for a moment.First, how does interest on a loan work? Through amortization, the amount of interest you pay gradually decreases over the life of the loan. This means in the beginning of the loan, you are paying off more interest than towards the end of the loan. Let’s look at how car loans are constructed and how car payment amortization works.Car loans accrue simple interest. This means that if you take out a car loan for $20,000 at 5% interest with a 48 month payment, you will pay back $2,108.12 in interest, with monthly payments of $460.59 for the next four years. However, car loans are amortized and “front-loaded”, meaning that, in the beginning, your payments aren’t split evenly between your interest and your principal. The amortization schedule below shows how your monthly payments are split up for the first six months of your loan.Let's look, for example, at a $20,000 loan at 5% interest over 48 months.Month: 1Principal Amount: $20,000.00Monthly Interest Payment: $83.33Monthly Principal Payment: $377.25Ending Balance: $19,622.75Month: 2Principal Amount: $19,622.75Monthly Interest Payment: $81.76Monthly Principal Payment: $378.82Ending Balance: $19,243.92Month: 3Principal Amount: $19,243.92Monthly Interest Payment: $80.18Monthly Principal Payment: $380.40Ending Balance: $18,863.52Month: 4Principal Amount: $18,863.52Monthly Interest Payment: $78.60Monthly Principal Payment: $381.99Ending Balance: $18,481.53Month: 5Principal Amount: $18,481.53Monthly Interest Payment: $77.01Monthly Principal Payment: $383.58Ending Balance: $18,097.95Month: 6Principal Amount: $18,097.95Monthly Interest Payment: $75.41Monthly Principal Payment: $385.18Ending Balance: $17,712.78As you can see, in the earlier months you are paying more in interest than you are later on. Based on this amortization, you can see the total yearly amount paid in interest.Interest Paid:Year 1 - $894.80Year 2 - $657.79Year 3 - $408.68Year 4 - $146.83The majority of your interest is paid in the first two to three years that you have your loan. That means that the longer you wait to refinance, the less beneficial it will be to do so. This is because one of the major benefits of refinancing is less paid in interest over time, but if your interest is mostly paid off, you won't get to see that benefit.Current Interest RatesWhen deciding whether now is a good time to refinance a car loan, look at the current interest rates being offered. Are they better than your original interest rate? Depending on the size of your loan, even a .5 % difference can make a huge difference in the total amount you will be paying.Your Current Credit ScoreCheck your credit score using one (or all of the) of the three major bureaus: Equifax, Experian, and TransUnion. Is your credit score better than it was when you initially applied for a car loan? If so, now might be a good time to refinance.On word to the wise: Refinancing will result in another hard inquiry on your credit report, which will negatively affect your score for about a year. It may also lower the average age of your accounts, which can negatively affect your credit score. So, if you need a high credit score for another reason, like applying for a new mortgage or taking out a new lease on an apartment, consider this in your decision to refinance your car. However, there's no hard inquiry involved in getting a quote, so if you're not sure whether the savings will be enough to make a difference, you can always get a quick and easy quote to help make your decision.Your Current Financial SituationIf you need a little more breathing room every month in your budget, now might be a good time to refinance. By reducing your interest rate or lengthening the payment period, you can reduce your monthly payments. And, for those who need a break from their car loan, refinancing can also give you a few months off from payments.On the flip side, if you would like to pay off your loan earlier, refinancing to a lower rate and shortening your payment period will save you money in the long run. Depending on your current loan, you may even be able to pay less monthly and less in interest over time!When It Doesn’t Make Sense to RefinanceThere are times when refinancing will not be beneficial to you. If any of the following apply to you, it might not be the best time to refinance your car:Your credit score has decreased. You will most likely not find a lender to give you a better rate, unless your current loan is at a really bad rate.Your vehicle has a lot of miles on it. Most lenders have a minimum loan amount and if the car has depreciated in value significantly, it may not be worth your while.Your loan is “upside-down”. If you owe more on your vehicle than it’s worth, you may struggle find a lender that will be willing to refinance at a good rate.All that said, if you're on the fence, it can't hurt to try — getting a quote doesn't require a credit check and can give you an idea of whether or not you should refinance in just a few clicks.And that's everything you need to know about when you can refinanceWhile there are few limitations on when you can refinance, you can use this tips to time your refinance correctly to get the best possible deal. In order to find the best time to refinance your car, take a look at your current loan’s terms and payment period as well as your personal finances.Depending where you are in your repayment schedule, refinancing could save you a bundle. At Auto Approve, we help you find the best refinancing options for your situation. If you’re interested in refinancing, use our quote tool and we can help you find you your best possible savings to put more money back in your pocket.GET A QUOTE IN 60 SECONDS
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*APR and Fees Disclosure: Auto Approve works to find you the best Annual Percentage Rate (APR), which is based on factors like your credit history, vehicle and desired payment terms. Fees to complete your loan refinance vary by state and lender; they generally include admin fees, doc fees, DMV and title. Advertised 6.24% APR based on: 2019 model year or newer vehicle, 730 minimum FICO credit score, and loan term up to 72 months. All loans subject to credit and lender approval.
Auto Approve has an A+ rating with the BBB and is located at 2860 Vicksburg Lane North Plymouth, MN 55447. Auto Approve works to find its customers the best terms and APR, which are based on factors like credit history, vehicle, and desired payment terms. Loan amounts, costs, and fees vary by state and lender; they generally include admin fees, doc fees, DMV, and title fees, depending on the lender and period of repayment. There is no fee to obtain a quote and all refinancing-related costs are included in the amount financed so there are no out-of-pocket costs! For more information, please go to AutoApprove.com.