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The 5 Steps To Approval For An Online Auto Refinance Loan
By EchoBay Loans Staff Writer

About a year or so ago, you took out a high-interest car loan due to your not-so-great credit. Now you've reduced your debt, paid off those nagging collectors, and you're in much better financial shape today. You're tired of paying your ridiculously high auto loan interest rate, but you've heard the horror stories about auto refinance and how difficult the process can be. There's good news for you. Refinancing your car through an online car refinance process is not nearly as hard as you think. In fact, the entire online auto refinance process can be broken down into five simple and hassle-free steps.

Step 1 - Dollars and Cents
The first step in the online auto refinance journey is considering whether or not you owe enough on your car to make it worth a lender's time.
On average, the minimum refinance amount required by lenders for online auto refinancing is $5,000. Most of us won't have to worry about the maximum amount that can be refinanced by lenders since it averages $100,000! The best way to find out your exact balance is to call your current lender for your payoff amount. Just remember, this amount changes monthly so if you called a few months ago, you're going to need to call again.

Step 2 - You've Got to Shop Around
Once you have determined how much of a loan amount you're going to need, it's time to start shopping for the best rates. Many people assume that the first and only place they should call is their current lender. Don't make this mistake. If your lender even offers the ability to refinance your auto loan, they may not offer the most competitive rates available. Thanks to the Internet, shopping for rates is a matter of simply sitting in the comfort of your home or office and perusing the Web to compare rates charged by lenders and their auto loan refinance terms and conditions to find those that meet your needs.

Step 3 - The Application
Once you have determined which online refinance company is right for you, it's time to begin the application process. This is where things get hard, right? Wrong. Again, the Internet has made your life easier. Instead of making an appointment to meet with the loan officer at your local bank and then spending a couple of hours filling out forms and waiting days to hear if you are approved, a loan application online is a matter of a few simple mouse clicks. The process literally takes five minutes or less and approval can be instantaneous.

Step 4 - Sit Back and Relax
The next step of the online auto refinance process could not possibly get any easier; it doesn't even involve you. This step is completed by the finance company that you applied with and your current lender. Once your online car refinance application has been approved, the lender who will be refinancing your auto loan will call your current lender to verify your payoff information. This step is what ensures that the check that the new lender cuts to your old lender is the exact amount needed to pay off your auto loan.

Step 5 - Your John Hancock
Once your online auto refinance loan is ready to close, you'll be given a number of documents that you will need to review and sign. These documents usually include a refinance note, disclosure and security agreement, a limited power of attorney, odometer statement, and an authorization for payoff. If you're having your monthly payment deducted from your checking account on an automatic basis, you will also need to sign an "authorization to debit" that authorizes your new lender to make the monthly deductions from your account.

At this time you're also going to need to pay what is called a "lien holder change fee". This fee is required by the state you live in and can range from a few dollars up to $65 depending on where you live. Once you've reviewed the documents and have paid this lien holder change fee, you simply return the documents to your new lender and the lender pays off the balance of your current car loan.

From beginning to end, the process is painless and can save you hundreds, even thousands of dollars in the long run. Even if you only save $600 over the life of your loan, and it took you a total of three hours to complete the online car refinance process, that equates to $200 per hour. When you look at it that way, online auto refinancing can be a pretty lucrative endeavor.


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