Tag: loans

How to Refinance an Auto Loan

There are many reasons why you would want to refinance an auto loan. One of the main reasons is to lower the price of the payment on the vehicle. This is a good reason if you can not afford the payment on the vehicle already. Be careful since one of the main ways to reduce the monthly payment is to extend the length of the loan. This will make you pay more money in the long run, so make sure it is necessary to do so. Another reason is that the first place that gave you a loan has some very unfavorable stipulations, like not being able to pay on principle, a high early payoff penalty, or some other charges being added besides the interest. This would be a good case to find a new place to finance a loan so you can get out of those unfavorable stipulations. It would probably be good to get a monthly payment that is actually easy to pay extra money on per month. This will help payoff the loan in a much shorter time span. It will also allow you to pay less interest over the course of the loan as well. One thing to consider before going any further would be the state of your credit score. Make sure that it has risen around 50 points from when you got the loan in the first place. This doesn’t always have to be the case and with some looking around at banks you may be able to find one that will refinance the loan with more favorable stipulations. However, it will probably be safer to raise your credit score some before trying.

If you don’t know how to raise your credit score check out my post on “How do you build your credit as a college student?”. The advice can be applied to non college students as well.

Where do I get the Loan?

After determining if the idea of refinancing the auto loan is a good idea you have to find a bank or credit union that will refinance the loan. It will probably be easier to get a loan from a local bank that you have an account at and if you don’t go to a local bank it may be good to try whatever bank you have an account with first. After that you can try looking into local credit unions, because they usually have better interest rates then most banks. It is definitely preferable to talk to someone in person in order to get the process going. If you meet someone in person then you can tell them about your circumstances and they may be able to give you an idea if you will actually get the loan or not. This can keep you from getting your credit checked multiple times while trying to find a bank that will give out the loan. Make sure to also ask them about there terms for refinancing loans. It would do you no good if the new loan also came with stipulations that were unfavorable. Make sure it is easy to pay on principle only and that there are no extra fees per month for each bill. Another thing to check is how much they will charge for paying off the loan early.

What Do I Need?

Depending on where you get the loan will depend on the paperwork that they will need. Here is a list however that should cover most of the basic paperwork you will need to print off before going to the bank.

  1. Drivers License
  2. Title of the Vehicle
  3. Registration of the Vehicle
  4. Proof of Insurance (Possibly)
  5. At least 2 years of Residency information
  6. Current Job
  7. Pay-stub (Possibly)

How do you pay off student loans?

This topic may not be directly related to the field of software engineering, but it definitely has an impact on most. There is no easy way to pay off student loans and it will take some time to pay them all off no matter what approach you take. There are a few things to keep in mind that may help you pay off those loans faster. The first thing to keep in mind that the loans you have probably compute interest daily and this means that the interest can start to add up fast. It also means that the longer you go without making a payment the more of that payment will go toward interest. It is usually better to split up your monthly payment into four small weekly payments. Just splitting the payment up you can take one to two years off the life of the loan. Granted this can depend on what your certain circumstances, but in most cases this will help lower your loans faster and you will have to pay less interest. The next thing to remember that usually the payment that the institution that services your loan calculates is the bare minimum and that it is better to try and pay more then the actual payment. This can be hard sometimes but every little cent adds up when paying of the loans. Another thing to do is read all of the documents regarding your loan. Sometimes the small details in those documents can save you some money and save you from getting into a tough situation. Just think once that loan is gone you will have an extra chunk of money each month to spend or invest.