When Can I Refinance My Car Loan?

Posted by auto on July 12, 2019 @01:10:45 EDT

It’s a common misconception that is nevertheless widely disseminated in the automobile loan industry that loans are set in stone, and once you sign up for your credit repair car loan, you’re locked into a chain of events that offer no way out.

While this can seem normal, and even like it’s an inherent principle in the deal you signed up to, we’re delighted to inform you that it most definitely is not the case, and there’s no reason to think you can’t refinance your car so that you can pay off your existing loan, have lower monthly payments and get a better rate.

The Point Of A Loan

The thing to understand is that credit repair car loans, just like any loan, are simply a method of repaying money that was leant to you in order to purchase an item. Items that cost money are called products, and all products fluctuate in price and value (which aren’t necessarily the same thing, at all) in accordance with the whims of the market.

We know, we know. Market is a big, scary word that implies this constantly shifting matrix of complicated numbers, figures, and algorithms. To tell the truth, we can’t claim to understand the market perfectly: nobody can. But we do know about a few basic principles that can help us to help you understand why, when, and how you’ll be able to refinance your car loan.

While the car loan you signed up to may have looked fantastic at the time (and by all means, it may well have been), maybe as the months go by something relatively drastic happens and impacts the way the market is performing. Suddenly, the excellent deal is starting to look a little exploitative, even though that’s not how it was presented—or even how it really was—at the time. You’d be well within your rights to feel a little hard done by. After all, you did your best at the time, but now things have changed beyond your control and you’re left feeling a little short-changed.

In all honesty, we’ve all been there. It can be a little crushing, realizing that you’re not doing quite as well as you thought you had been doing; and when it’s something as bizarre and abstract as the market that’s to blame, it can be very difficult for humans to find something to blame, so they can wind up blaming themselves.

This can turn an excellent credit repair car loan into a source of stress, which is the last thing anybody wants when they’re already dealing with a topic so stressful and fundamental to their financial lives as an automobile loan. But there’s good news on the horizon. That credit repair car loan which you managed to secure for yourself was written on paper, not stone. As with every kind of financial deal, refinancing is not only a possibility, it can actually be downright easy to perform, depending on where exactly you are and what the state of play is with regards to your personal financial situation.

All Is Not Lost

In the following article, we’ll be breaking down exactly what’s involved in refinancing that credit repair car loan. We’re aware that when it comes to such personal situations as those which involve our money and time, it’s foolish to assume that we can provide a one-size-fits-all solution to the issue.

To that end, we’d encourage you to consider the guidelines below as simply a rough set of rules that can guide you towards making your own choices. As ever, you’re the only one who intimately understands the needs that are required by your particular situation, so there’s not going to be anybody else who can tell you exactly what you need to do.

But that’s enough of an introduction. Let’s get into how exactly you can go about refinancing your credit repair car loan, made as simple and straightforward as possible.

The Basics

Reworking an automobile loan deal is very similar to tasks like refinancing your house, or asking for a better rate on your credit card from whichever company you’re signed up with. Not that either of those things are necessarily as simple to do as refinancing a credit repair car loan is; we’d never go that far.

The important thing to keep in mind is that you have two main options. You can either go to the current company supplying you with your vehicle, or you can shop around (with your current lender or even with other lenders).

These are obviously radically different ways to approach the situation, and as with all matters financial, we urge caution and level-headedness. The credit repair car loan you already have may be such that you can’t quite imagine asking for a completely new loan. After all, you’ve already got your budget structured to handle this deal specifically. Is it really worth messing all of that up just for a shot at a better deal?

The answer to that question is an unqualified yes. Budgets can be stressful, but they can also be re-worked. That’s part of the magic of the whole process. And you can rest assured that no matter how comfortable you are with your current loan, you’ll eventually find yourself just as comfortable with financing the new deal, however that works out. Before you begin opening talks, however, there are a few things you need to ensure you’re on top of. We’re going to go into them briefly now.

Get Your Ducks In A Line

Rubber ducks lined up.

The most important thing when it comes to any item that requires a loan to finance is the appraised value of the product in question. In this case, that product is your car. If you were asking somebody to value your computer, you’d probably polish the screen and clean up the keyboard before asking them over, wouldn’t you? The exact same principle applies here.

Take your car first of all to a mechanic’s garage in order to give it a proper once-over. Don’t spare any expense at this stage; money spent on making sure your car works as well (and is as such as highly valued) as possible is money you’re going to rake back in over the long term, as you’re offered better rates, consistent with the more valuable product you’re asking for financing on.

No matter how great your credit repair car loan was at the time, cars are depreciating assets. We’re sure you’ve heard that term too many times already to count, but it’s worth reiterating just to make sure nothing is missed. As soon as you drove it off the lot, it started to lose value. That’s just the nature of the business. Keeping that in mind, you want to make sure it has lost as little value as possible, and that’s why the visit to the shop is necessary.

Give Yourself The Best Chance

Interior shot of a lottery-ball machine.

Ensure that you pay full price for the repairing of any problems that may have reared their ugly head during the mechanic’s tune-up. You certainly don’t want to be caught in a situation where you have paperwork proving that there’s something wrong with the vehicle, but also proving that you didn’t fix it when you had the chance. While repairs can be expensive, it’s unlikely that there are any major problems that would require a large fee that slipped under your radar. You can usually tell when something’s going seriously wrong with a car.

After that, take it to get a thorough cleaning, inside and out. While this sounds superficial—and is, in all honesty, superficial—it’s going to make a major impact on the appraised value of the car, which in turn is going to directly affect how much of an improvement the new financing scheme will present over the new credit repair car loan you acquire to refinance your car. If you score a lower interest rate because your car is seen as less of s risk, you will be able to decrease your monthly payments, freeing cash up for other financial obligations in your life.

Sort Out Your Finances

A piggy bank.

The next step is to make sure that all of your current payments on the existing credit repair car loan have been paid off. You most definitely do not want to rock up, ready to take out a new loan, only to find you haven’t been keeping up to date. That’s not a good look for anyone, and isn’t a great start to the whole process because it shows pretty clearly that you have no idea what on Earth you’re talking about.

Once you’ve made sure you’re up to date on your credit repair car loan repayments, check your credit rating. The better your credit score is, the better the deal you’ll be able to arrange is going to be. Even minor changes in the score can result in significant improvements to the overall vehicle loan, which is so often the case with the vehicle industry.

Get In Touch

Only after you’ve got everything in order is it time to contact your dealership. We recommend attempting to refinance with your current lender first of all, simply because they’re unlikely to want to lose your business and as a result will probably be more open to coming up with a new plan. Ask them whether or not they’re amenable to the idea of negotiating a new credit repair car loan, and don’t be afraid to mention that you’re ready to go elsewhere if necessary.

After you’ve got their appraisal and new terms, it’s time to go elsewhere anyway. There’s no reason not to shop around for the best rates when it’s something as financially burdensome as a new credit car loan, which is going to be something you pay for out of your wages every single month. As long as you have a good history of repayments and a decent credit score, a whole range of lenders will be queuing up to offer you a new, and better deal.

Conclusion

By the time you’ve got a few different offers, you’ll probably have a sense of which suits you best. At this point it’s time to head over to wherever the best offer came from and sign on the dotted line. Congratulations! You have now successfully refinanced your credit repair car loan and can look forward to better terms and an overall brighter financial outlook than that which you had originally. That wasn’t so bad, now was it?

If you enjoyed this article, be sure to check out some of the other pieces we have up on our blog. They’re written about a wide range of topics, all of which will be of interest to any automobile enthusiast. And while we’re at it, have you considered giving us a call to help you secure a car loan? Don’t worry about whether your credit score is good enough. Here at www.autoloans.ca, we consider each and every application we receive, so it really can’t hurt to give us a ring and see if we can’t work something out for you.

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