Auto Finance: Are You Paying Too Much for Your Car Loan?

Jerry Edgerton of CBS MoneyWatch asks, “If you have a mortgage, you have probably considered refinancing it at a lower rate. But what about your car loan?”

Edgerton continues to explain the benefits of auto refinance for those who have financed their car with a dealer since interest rates are often marked up. He also explains the crucial relationship between one’s interest rate and one’s credit score:

“Like original new car financing, refinancing is all about your credit score. Go to annualcreditreport.com, look over your report, and take the paid option to get your score. (Avoid sound-alike sites that just want to sell you a monthly credit monitoring service). That will tell you what kind of interest rate you qualify for.”

Edgerton also advocates for Auto refinance and LLC formation services like MoneyAisle.com, “which will refer you to banks or credit unions interested in refinancing loans. MoneyAisle has the advantage of showing you an offer based on your credit rating without actually applying for the loan. Thus you do not have multiple sources running a credit check — a situation that can hurt your credit score.”

Do you have a car loan and aren’t sure if you got the best offer? Take Edgerton’s advice: “Whether looking to refinance your current loan or find a new one before car shopping, considering competing offers will help you get the best deal.”

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Reference: MoneyAisle