Auto Loans

[EaglesFan2006]

Hello,

I am giving serious thought to refinancing my car loan.  Since getting the loan in December 2009 at an 18 percent rate, I have worked hard to fix credit.  I have had no new negatives, have added a couple of credit cards, and increased my income.  Right now I am paying $409.89 a month.  I am looking to get that lowered as well as reducing the amount of money I pay over the life of a loan.

My question is...how does this work?  I get letters every week from Capital One about refinancing a loan.  Are they are a reputable company?  Can I keep my car when doing this?  I am looking for some ways to go about doing this and any advice is appreciated.  Thanks!

[pizzadude]

The refinance process is really quite easy.    Most of the time the new creditor takes care of paying off your old loan, you keep the car in your possesion the whole time.

Yes, Cap1 is reputable for refinancing auto loans ~ they pull all 3 CRAs however.   You could also try with a local bank or CU to see what they say.  

Hopefully you can get that 18% rate knocked waaaay down....Good luck ! 

[EaglesFan2006]

Thanks..a few more questions

1) Is there a similar method where you can get more than one inquiry within two weeks and have it count as one against your credit report...kind of like your initial loan?

2) If you refinance, how does it work with overlapping the payment on your current loan?  IE, if I refinanced today and I have a payment due to my current loan on the 25th, how would that work?

3) Are there any other reputable refiance options besides your bank and CapOne?  Does it make sense to try and refinance through your current lender?

[pizzadude]

---

EaglesFan2006 wrote:

Thanks..a few more questions

1) Is there a similar method where you can get more than one inquiry within two weeks and have it count as one against your credit report...kind of like your initial loan?   Yes, FICO scores AUTO inquiries as a single inquiry as long as they fall within a certain window,between 14 and 45 days depending on the FICO version.

2) If you refinance, how does it work with overlapping the payment on your current loan?  IE, if I refinanced today and I have a payment due to my current loan on the 25th, how would that work?       You are responsible for making payments on your current loan until your lender receives the payoff check.   You would request a payoff amount from them, which is usually valid for 2 weeks or so, in that time your new lender would send the money to pay off your old loan.    After your current lender has recieved the payoff you would then start making payments on the new loan according to the payment schedule.

3) Are there any other reputable refiance options besides your bank and CapOne?  Does it make sense to try and refinance through your current lender?   Yes you can certainly ask your existing lender if they will refi.  Some lenders will do this, some won't.  

---