- What is loan-to-value-ratio?
The loan-to-value ratio is a comparison of the loan amount to the value of the vehicle. The value of a vehicle can be found by consulting an auto industry pricing guide such as NADA or Kelley Blue Book.
- Can the interest rate on my loan contract be changed?
You may be able to change your interest rate if your contract is set up that way. The best way to find this out is to talk to a professional to see if the change is valid.
- Are there any costs for refinancing?
Typically, when you refinance, what you do is pay off the existing balance and then sign a new loan with new terms. When you sign this new loan, you again have to pay all the same costs you paid with the original loan. You may want to take this into consideration when deciding if you are ready to refinance.
- How do I benefit from refinancing?
By refinancing you may be able to shorten the life of your loan and gain equity faster. However, by shortening the life of your loan, you are going to end up with higher monthly payments. By refinancing, you may also be able to save yourself hundreds of dollars over the life of your loan by obtaining a lower interest rate. At the same time, you can get yourself some extra cash by refinancing for the same amount of money with a lower interest rate. This way you would be able to pay off some high interest debts you may have.
- Do I have to wait a certain period of time before I can refinance?
No, there is no certain required waiting period when it comes to refinancing. You may even refinance more than once in a matter of months.
- If I have already refinanced my home or vehicle once, can I do it again?
Yes, you can refinance your home or vehicle more than once and it may be very wise to do so if interest rates are steadily falling.
- Should I use a home equity loan instead of an auto loan?
Home equity loans are a great alternative to auto loans. You can get a lower interest rate with a home equity loan than you can with an auto loan. What makes it even better is that the interest you pay on a home loan may be tax deductible.
- What does APR stand for and what does it mean?
APR stands for Annual Percentage Rate. The APR on a loan includes the costs involved in securing the loan such as the interest rate, points and other related fees you will be paying annually. The APR is meant to provide you with a rate to use when comparing loans.
- What is the difference between APR and the interest rate of a loan?
The interest rate on a loan is the cost in repaying the amount you borrowed, multiplied by a certain percentage that the bank charges you for the time it takes you to pay it back. The APR includes all the costs the bank charges you plus the interest rate and the amount of the loan. When comparing interest rates from lender to lender, you want to look at the APR.
- What is a lien holder?
A lien holder is the institution (usually a bank) that has the right to take and hold or sell the property of a debtor as security or payment for a debt borrowed from them.
- What is a title search?
A title search is a search that reveals any liens, lawsuits or legal claims involving the property that is going to be bought or sold. Lenders often require a title search.
- What is Title Insurance?
Title insurance is required by lenders. It is protection for the buyer and lender if there are complications with the title after the deal has been made.
- Do credit bureaus approve me for a loan?
Credit bureaus provide lenders with copies of your credit report. This is what most lenders base the decision on whether they are going to grant you credit or not. Credit bureaus do not make the decision for the lenders. It is up to that lender to decide what the acceptable criteria is for them.
