VEHICLE REFINANCING
If you have taken out a car loan and are unhappy with the terms, there are solutions to help you find a better rate. Vehicle refinancing is a simple process where you take on a new loan that is used to pay off the balance of your existing loan. Here at Insta Auto Solutions, we can help you refinance.
What Are the Benefits of Refinancing Your Car Loan?
Refinancing your car loan can create many benefits, including securing a lower interest rate, extending your loan term, and saving you money.
Save Money With a Lower Interest Rate
If you have a subprime auto loan with a very high-interest rate, you may benefit from refinancing. If you can lock into a lower interest rate, you stand to save thousands of dollars in interest payments amount over the course of your term. Use our car loan calculator to see how a lower interest rate can lower your costs.
Extend Your Loan Term
If you are finding it difficult to cover your monthly payments, refinancing might help by stretching out the term of your loan. For example, if you are two years into a five-year term, you can refinance the balance of the loan and spread the cost over a longer period of time. Some lenders will allow payment terms of up to 96 months, which can help lower your costs. Use our car finance calculator to see how extended loan terms can help lower your monthly costs.
When to Consider Refinancing Your Car Loan?
Refinancing your auto loan might be a good option if your financial position has improved since your initial loan application.
Has Your Credit Score Improved?
The credit bureau Equifax classifies credit scores between 300 and 900.
- 660-724 = Good
- 725-759 = Very Good
- 760+ = Excellent
You may not qualify for favourable loan terms if you have a score lower than 560. If you have built up a credit history and have been paying your bills on time, then your credit score may have improved. An increase in your credit score may improve your chances of qualifying for a better loan at more favourable rates.
Have Interest Rates Lowered?
When you have an auto loan locked into a low prime rate, but the interest rates fall later, you can use refinancing to lock into the lower rate. This is ideal for borrowers who have a good or excellent credit score.
Do You Have a Low Debt-to-Service Ratio?
When you pay off significant debt and have very little debt remaining, you may have an improved debt-to-service ratio. This is viewed favourably by financial lenders and will improve your chances of qualifying for improved loan payment terms.
What Are the Penalties on an Existing Loan?
When you pay out an existing loan, you may incur penalty charges. Check your loan contract to find out what the early repayment fees are. If the fees are high, it may not be worth refinancing.
How to Refinance Your Car Loan
If you want to refinance a car loan, you will need to apply for credit with a new lender. Do your research to find the best financing options that are available to you. Lenders offer rates that fall between seven to fifty percent, and even a few percentage points difference can save you money in the long run. Talk to an advisor about your situation to find out if refinancing is a good solution for you.
At Insta Auto Solutions, our financial advisors are here to help you navigate the process and get the best terms. Give us a call to find out if refinancing is a good option for you.
Gather Your Documentation
In order to qualify for a new loan, you will need to provide the following:
- Government-issued photo ID
- Checking and savings account statements
- Proof of employment—letter from your employer or several pay stubs
- Income statements or pay stubs
How To Rebuild Your Credit Score
If you still have a low credit score, there are steps you can take to improve it.
Pay Your Bills On Time
This is one of the most important steps you can take. Pay all of your bills in full and on time. This includes bills for your credit card, utilities such as gas and electricity, cell phone, and auto loans. Missed or late payments are reported in your credit history and negatively impact your credit score.
Apply For a Secured Credit Card
With a secured credit card, you are required to give the lender a cash deposit. If you want a credit limit of $500, you will need to provide a deposit of $500. You will need to match that amount if you want a higher limit.
If you have some cash to spare, a secured credit card is a great way to build up your credit. Just be sure to pay your bills on time, or the lender will use your deposit to recover the costs, and your credit score will suffer as a result.
Limit Your Loan Applications
Lenders get worried when they see a large number of credit applications. However, if you are making multiple inquiries about the same type of loan, they are all listed in your credit history but generally count as one inquiry on your credit score.
Reduce Your Debt
When your debt burden is low, lenders are more likely to lend you money at favourable rates.
We Can Help You Refinance
Whatever your situation, we can help you to refinance your auto loan. Our financial advisors are happy to take your call and offer expert advice to help you reorganize your loan, reschedule payments and fix your credit. If you have an issue with your car loan, come and see us for expert advice.
FAST APPROVAL PROCESS
1. Apply For Your Loan
Online application only takes minutes to complete. We only ask for information we require.
2. Get Approved
Your Insta Auto Loan is processed fast with same day approvals.
3. Go For a Spin
Take your car out for a drive!
CONTACT US
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