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Auto Refinance Companies. A Comparison Of Loan Rates
By EchoBay Loans Staff Writer

You've decided that it's time to refinance your current auto loan and there are advertisements and offers flying at you from all directions and from a variety of lenders. What's even more confusing is that each one of these lenders claims to be the best of the best and promises the lowest rates and the best service. How do you know which one is really the best lender to work with and which ones are blowing hot air? Will the real #1 auto refinancing source please stand up?

It's true that some lenders are better than others; and as with any consumer-driven industry, there are top picks that will get you the best results and the bottom dwellers that will bleed you dry and take advantage of you at every turn. Having the lowdown on the who's who of auto refinance companies will help you avoid any unnecessary and costly mistakes.

Let's work from the bottom up and start with the worst of the worst. Of all of the auto refinance companies out there, there is only one that you should avoid at all costs. The buy here/pay here car dealerships that offer refinancing capabilities are an uninformed consumer's worst nightmare. Unless you like throwing your money away so some used car salesman named "Slick" can take a vacation in the Bahamas, you're not going to want to refinance with one of these operations.

The interest rates they charge are enough to leave any financial analyst nauseated. If your state were to allow a 100-percent interest rate, these guys would charge it. In fact, the law is the only thing that keeps these opportunistic lenders in check. If you've considered refinancing your current auto loan with such an auto refinance company, make a 180-degree turn and run in the other direction.

Once you know to steer clear of the buy here/pay here auto refinance companies, you're left with a list of more professional and legitimate auto refinance choices. Again, we'll start at the bottom of the list with the least convenient and least economical choices. On the bottom of this list is the local bank. Not because your bank wants to take advantage of you, but because they're just not as competitive as the other auto refinance companies that are at your disposal.

The first reason the local bank didn't make it to the top of the list is because of the longer, more complicated application and approval processes that are the norm with this type of lender. The first thing you need to do when applying with one of these auto refinance companies is schedule an appointment to meet with a loan officer and fill out an auto refinance loan application. Then, once you have made the appointment, you get to drive to the bank branch that you're dealing with, wait at least 15 minutes for the loan officer to come out of his office to greet you, then fill out a long, lengthy, hand-written application, and then go home and wait for days while the bank processes your application. Then, after all of that, if you're approved you'll be given a less-than-competitive interest rate and you might have to drive back to the bank to sign some more papers.

If that doesn't sound like the ideal lending situation to you, we're not surprised. That's why many consumers bypass the bank and consider working with their local credit union. Because credit unions are nonprofit organizations, they are able to offer their members some of the lowest interest rates available and many of the smaller credit unions offer more friendly and personalized service.

However, while credit unions are higher on our list of auto refinance companies than banks are, credit union borrowers will still need to go through the same tiresome application process that the banks impose on their customers. Even the credit unions that do process their applications more quickly than banks do are still not as fast as the top choice on our list of auto refinancing company choices.

Which brings us to the top choice of all of the automobile refinancing companies - the online lenders. These auto refinance companies are usually able to offer consumers the lowest possible rates due to their reduced overhead costs; but that's only part of the picture. When borrowing through the online auto refinance companies, the application process literally takes minutes and approval can be instantaneous. You fill out an online form, click the submit button, the website pulls your credit report and analyzes your application, and you can receive a preliminary approval within seconds.

There are even websites that have online lenders compete for your business, allowing you to choose the lowest interest rate offered to you. With online lending, you're not limited to the businesses in your immediate area and are now able to choose from lenders across the country.

Many times, the entire refinancing process occurs without you having to leave your home. It's hard to compare other auto refinance companies to online lenders when it comes to speed, convenience and low interest rates. With all of the benefits this types of auto refinance company has to offer, they probably deserve a first look for your auto refinancing needs.

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