Get Better Rates on Auto Loans and Auto Refinance Loans!
A little negotiation can go a long way toward decreasing your interest rates. You won't get it if you don't ask!
People often wonder why a person would go for a vehicle refinance loan. After all, cars always depreciate in value the moment they leave the lot. However, buyers still must pay the full amount they agreed to, regardless of the value of the car. A vehicle refinance loan can save you money by getting you a lower interest rate.
Often, buying a car is a person’s first major purchase with credit. That means when you first purchase your car, you’re likely have little to no credit. After a couple of years of faithfully making car payments, you could easily qualify for a lower interest rate, which could save you a whole lot of money. Even if you had good credit to begin with, making regular car payments on time can improve your credit score, and you should take advantage of that.
Lower Your Interest Rate
It takes discipline, but it can be done. If you want to pay less on your auto loan or auto refinance loan, here are 10 ways to decrease your interest rates. In general, these are all things you can do to improve your credit score.
1) Pay Bill When They’re Due
Sounds obvious, but did you know that the main source of negative information on credit reports is late payments? With loans and credit cards, making at least the minimum payment in a timely fashion is vital, as the interest rate on the credit can explode if you drop the ball.
2) Keep Credit Card Balances Down Low
Have you heard that having an outstanding balance in excess of 35 percent of your available credit line lowers your credit score? It’s true. That means that on a $1,000 credit line, try to keep your outstanding balance under $350. Paying above the monthly minimum helps quite a bit here.
3) Don’t Close Paid Off Accounts
Having lines of credit in good standing helps your credit report. This is particularly true if those lines of credit have been on the docket for a while. While there are limits to this, like having dozens of paid off credit accounts (which is excessive), in general anything in good standing will help raise your credit score and lower the kind of interest rates you get on auto loans and auto refinance loans.
4) Be Discriminating as to When You Seek Credit and What Rate you Sign Up For
Resisting impulse purchases on credit is vital. However, if you do find yourself in a situation where you are going to make a large purchase and the store offers you a 15 percent discount if you apply for their credit card, don’t rush into saying yes. Check out the APR you’ll be getting to see if it’s far enough below 20 percent to be worth your while. Anything higher can end up being toxic for your credit score over time.
5) Divorcing? Separate Your Accounts
Joint credit cards and co-signing on loans are things married couples do sometimes, even if some financial experts recommend against such ventures. Your spouse’s credit marks will impact your own credit report when you marry, particularly when joint accounts are involved. If you divorce, you’ll want to separate accounts so that you know that only your own actions will be impacting your credit score.
6) See Old or Inaccurate Info on Your Credit Report? Get it Off of There!
Look over your credit report from all three credit reporting agencies: Equifax, Experian and TransUnion. If you spot anything out of date or inaccurate, file a dispute with the agency and it can be removed in 10 to 30 days. By inaccurate, I mean that if even one number is incorrect on an account number listed on your report, the entire reference (and its impact on your credit score) can be removed.
7) Don’t Check Your Credit Every Five Minutes
Examining your credit once a year with AnnualCreditReport.com should do it. Maybe twice a year is OK, or quarterly at most. Anything more and it begins to impair your credit score.
8 ) Don’t File for Bankruptcy if You Can Help It
If things are absolutely in the toilet, then a bankruptcy may be the only way out. However, you must keep in mind that this black mark will stick with you for seven to 10 years afterward. If your credit could be better but isn’t destitute, bankruptcy is a bad idea. Pay your bills on time, keep your spending in check and eventually you’ll dig your way out.
9) Avoid Consolidating Balances onto One Credit Card
Related to numbers two through four above, don’t make the mistake of consolidating all of your credit card balances onto one card. Sure, you’re doing it for a better interest rate, but the benefit should be tremendous before you consider such action. Maxing out one card with a bunch of transfers doesn’t look good, even if the others are free of outstanding balance. A better option is to pay down the credit cards with the highest interest rates.
10) Make Deals with Your Creditors
We all know that creditors are in this think to make a profit off consumers. However, if a situation comes up where a consumer is unable to pay, they’ll still want to receive some kind of recompense. If your credit history is good, they’ll be more likely to settle for a late payment here or there, so long as it isn’t excessive. Furthermore, in situations where a consumer is insolvent, creditors will sometimes agree to a lower payoff amount, but they won’t offer it unless you ask!
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