While refinancing a car loan seems like the best way to get out of a bad car loan, it isn’t always easy, especially if the process requires you to run from one place to the other. On the other hand, refinancing your car loan online is much quicker and convenient.
Why Should You Refinance Online?
Apart from the fact that it’s convenient and doesn’t require you to travel much, it’s also a reliable way to obtain a lower interest rate since you can get multiple quotes from various auto lenders simultaneously. Not only is the response quick but you will also have various options to choose from only within 24 hours. Moreover, you will no longer have to deal with the frustration that comes with your expenses and time spent on the entire procedure.
Are the Requirements of an Online Application Different?
Whether you apply online or in person, you will more or less require the same information. As per the norm, you will need all necessary documents pertaining to your existing loan, vehicle, income, residence, insurance, and, of course, credit score. Again, it is possible for these requirements to vary based on who the lender is, but the basic requirements always tend to remain the same.
Let’s take a small example here. If the loan you’re applying for is for a military car, then you will need proof of being in military service. Hence, in this case, the requirement becomes a bit more specific. In order to be sure of a lender’s requirements, it’s best to check their website or contact them directly to learn about all the information you’ll need to supply.
In a nutshell, whether you apply online or in person, it’s important to understand there are advantages and disadvantages associated with both. However, no matter what option you stick with, you will ultimately have a larger pool of lenders to choose from and more options when comparing rates.
Are Online Lenders Reliable?
Thanks to the expanding pool of lenders throughout the market, you can now come across several of them without having to step foot outside of your house. It’s much easier to get quotes from online lenders now than it has ever been.
While online lenders are a credible source of refinancing your auto loan, you may also want to look into what credit unions and small local banks offer. After all, you don’t want to end up putting all your eggs in one basket.
In general, the process is straightforward whether you apply online or in person. The only difference is having to fill an online form and providing the given platform with all the necessary information. Furthermore, don’t worry if you see several inquiries on your credit report.
Lenders tend to run soft inquiries to determine whether you’re suited for an auto loan and if you are, they will most likely give you a rate quote. This is when you actually apply for the loan and undergo a hard inquiry, which may end up affecting your credit score negatively.
Is It Time for You to Refinance Yet?
Before you consider applying for an auto refinance, figure out how far along you are in your schedule for the current loan payment. If there’s only a year left, then you’re better off with your current loan since you’ve already paid most of the interest.
On the other hand, if your goal is to lower your monthly payments, you may want to do thorough research on whether the new terms will suit your needs. For example, lowering your monthly payments often comes at the cost of extending the repayment period. This means that you can end up paying more during the life of the loan.
A shorter repayment term, on the other hand, can mean higher monthly payments and a lower interest rate. This means you will be paying less in the long run. Again, the real deal is to land a lower interest rate because that’s what makes all the difference when it comes to making monthly payments, and this way, you will also be able to save more money.
Apply for a Loan Online
Once you’ve shopped around and landed a deal that suits your needs, you can proceed to fill out an official application online. Once the lender approves it, they will most likely pay off your old loan and help make the transition easier. This is when you can start making monthly payments to the new lender and move forward with the new terms.
If all goes well, your new lender will also provide you with all the paperwork with the terms and conditions of your new deal. However, make sure you store it in a safe and accessible spot.
The Bottom Line
In conclusion, while car refinancing isn’t meant for everyone, it does go a long way to help you save money by reducing your interest rate. Moreover, with several options available online, you may not have as much of a hard time finding a suitable lender. Furthermore, you will also be able to save your time and expenses from not having to travel around.
However, make sure to visit your potential lender’s website and figure out their requirements before starting the application process. Remember, your goal is to shorten your repayment term length while having a low-interest rate.