How do you refinance an auto loan?

I don't know the specifics of the loan (it's my boyfriends), but he purchased a vehicle around October of last year. He had never had an auto loan before and had little credit history, so his interest rate was fairly high. His loan is through a credit union. I know he has had one late payment.


Knowing this, does anyone have any recommendations on refinancing? We don't know a thing about it, but we do know that gas is too high not to consider it!


Thanks!

How do you refinance an auto loan?
Let me see if I can get this answer out to you as fast and concise as possible.





1. What is Refinancing?


For a car, refinancing is taking a current loan and giving it to another (or the same lender) on new terms. The terms can go up or down (payments, interest, and length of term).





The old auto loan is paid off fully and title is transferred to the new lender. You cannot get cash out of this deal. You cannot change owners of the car by refinancing. If you don't need a cosigner, don't get one. (If this is your bf car, don't be a co-signer, trust me)





2. Why refinance?


Many reasons: 1. Extending your loan another few months can reduce your payments. 2. Reducing interest rate can reduce the amount you pay out over the life of the loan.





3. How much will I save?


That depends on many things. Most people think it's just the credit score of the borrower. But that isn't the only thing. LTV (loan to value, or the value of your car versus what you owe on it), DTI (debt to income, or what you make versus what you owe each month in rent, etc), and what the contents of your credit report are (collections, # accounts, etc.).





4. What you need when going for refinancing:


a. Car Info (make, model, year and VIN if you have it)


b. Loan Info (who, payoff, rate, payment)


c. Financial Info (monthly pay, monthly debts, SSN, etc)





5. Who do I go to for refinancing?


There is no right answer here. Start with the CU, see if they can help. I work for a car refinancing company that works a lot like Lending Tree, but for cars. We take your information to a list of lenders and get the best deal (like a personal shopper). Watch how many places you apply at though. Too many inquiries COULD (not will, could) hurt your credit. So be picky about who you apply to refinance with.





Let me know any other ?s you have. I'll add a link to our FAQs if that helps.
Reply:Most people refinance a loan to make the payments more affordable. You can either go through the original lender or to another loan company, who will buy out the balance of what your bf owes, and set up a payment plan. A word of caution, however, is that another lender may charge a higher interest rate even if the payment is lower, which will extend the time he will have payments, and actually make him pay more for the car in the long run. Credit unions and banks are generally more reliable than loan companies. He should probably stick with the credit union to refinance. If your bf can make his payments on time, generally they will negotiate for a lower payment, reasonable rate of interest, but a longer term.
Reply:all you have to do is go to your bank or to your credit union and refinance the loan...for example; i owe you 5000 at 10% financing and contractually i am committed to a 5 year pay off schedule...you can refinance , the existing amount for a shorter, longer or same pay schedule at a lower financing rate...this helps build up good credit
Reply:credit unions usually have the best interest rates. sad for your bf car loose value VERY FAST, he has probly been making mostly interest payments since it the begining of the loan. if you look up what his car is valued at now, (that would be the newloan) and his current balance he may owe more than the car is worth.