Business auto loan refinancing can be a great way to lower your monthly payments, simplify your loan, and save some money at the end of the day.
Business Auto Loan Refinance – A Step-by-Step Guide.
However, the process can be quite intimidating to those who have never done it before, which is why we’ve created this easy-to-follow guide on how to go about it as seamlessly as possible.
We’ll take you through each step of the business auto loan refinancing process, so all you need to do is read along and follow our advice to get started!
What’s Business Auto Loan Refinance
The business auto loan refinance process is a cost-effective way for business owners to pay off their old car loans and get new ones with better rates.
Business auto loan refinancing can be done in one of two ways: through the use of a bank or an online lender.
To start the process, all that is required is a copy of the company’s current car loan, proof of income, and a credit report.
The business should also be at least 2 years old, have been profitable for 2 consecutive years, and have no history of bankruptcy.
Online lenders often offer lower interest rates than banks because they don’t require as much paperwork upfront.
Auto refinance process
The first step in the business auto loan refinance process is to know your monthly payments.
If you have not been making your payments, the best way to find this out is to call your lender and ask them for that information.
If you already know this, then you can skip ahead.
Next, you need to figure out what type of car loan you currently have in place. The most common types are a retail installment contract (RLC) and a lease-purchase agreement (LPA).
An RLC is when a person buys a car and will make monthly payments until they pay off the full cost of the car.
An LPA is when a person leases or rents a car from an auto company or leasing company and pays for it through their monthly rental fee.
Key factors that determine auto refinancing eligibility
Business auto loan refinancing is the process of taking out a new loan to pay off an existing business auto loan.
This process can be beneficial if your credit score has improved significantly since your previous business auto loan and you are no longer upside down on your car.
In order for a business to qualify for this type of refinancing, there are several key factors that need to be taken into consideration, including:
-The purpose and duration of the new financing
-The amount you owe on your current car
-How much time is left on the term of the old car loan
-Whether or not you are upside down on your current car
Steps to apply for an auto loan refinance
Here are the steps to applying for auto loan refi:
1) Determine what type of loan you want.
2) Find a lender that offers that type of loan.
3) Complete the application.
4) Verify eligibility and creditworthiness.
5) Make sure you can afford the monthly payments for your new auto loan.
6) Close your current auto loan with your current lender.
7) Sign documents with your new lender and take delivery of your new vehicle.
8) Enjoy driving your new car!
9) Monitor your new loan carefully as it may be subject to early repayment penalties if interest rates go down.
10) You’ll likely need to provide extra documentation (e.g., copies of bank statements, tax returns, pay stubs, etc.).
11) For example, you may have additional paperwork requirements if you have been self-employed in the past 12 months or if this is not your first time refinancing with the same lender.
Types of auto loan refinance
Business auto loan refinancing is a process where you take out a new business loan and use the money to pay off your current business loan.
There are many reasons why you might want to do this, but the two most common reasons are:
1) You want to lower your monthly payment amount,
or 2) You want to change your terms from a fixed rate to an adjustable rate.
The first step in the process of a business auto loan refinance is finding a lender that will work with you.
This can be done either through word of mouth (from someone you know) or through research on the internet.
Your new lender will then look over your financial information and credit report and give you an estimate of what kind of interest rate they’ll offer you based on that information.
Typically, the higher your FICO score, the better deal you’re going to get. On top of your business credit score, lenders also consider other factors like how much cash flow you have coming in every month and how long it’s been since your last business loan refinance.
Once they’ve given you a quote for how much money they’re willing to lend you at which interest rate if all goes well, it’s time to go shopping!
If there are multiple lenders who gave you quotes around the same level, compare them side-by-side looking for things like customer service ratings or points that make one stand out more than another.
Getting competitive auto refi quotes
1. Get quotes from at least 3 lenders that can provide you with a car loan refinance for business use.
You may be able to find these on the internet, but your best bet is to call them up and ask for quotes.
Make sure they are a reputable company and that they offer loans for businesses as well.
2. Compare the different interest rates and terms of each loan offer in order to find the one that will give you the best deal.
Be sure to take into account all other fees associated with each loan such as origination, application or processing fees, or any other administrative fees (for example).
The total cost should include all fees so you know exactly what you’re going to pay when it’s time to sign the papers and go through the process.
3. Once you’ve found a lender who offers competitive rates, apply online or over the phone.
They’ll need some basic information including your personal information, business information, employment history, address history, and income statement before they can approve an auto loan for business purposes.
4. Some companies may request additional documents before approving an auto loan for business purposes like an appraisal of your vehicle’s value or proof that insurance coverage is already in place on your current vehicle if it’s being used as collateral during this process.
5. Review the final agreement thoroughly before signing anything.
6. You’ll need to get your signature notarized which can be done at any bank, post office, or government office where notary services are available free of charge.
7. As soon as you have gone through the entire business auto loan refinance process, contact your local DMV and register the new title to show ownership has changed hands.
How to tell if you need a car loan to refinance
A car loan refinance is an easy way to lower your monthly payments and get more affordable, flexible terms.
Plus, there are many benefits to a business auto loan refinance. For example, if you have a car that was financed through your business before you became self-employed and now want to finance it personally, the lender may allow you to do so as long as you are current on your payments.
Additionally, if you have a newer model or luxury vehicle that’s worth more than the original purchase price of the car, refinancing can help reduce or eliminate the gap between what is owed on the vehicle and its current market value. However, not everyone needs a new car loan to refinance.
What happens when you don’t have enough equity in your car?
When you don’t have enough equity in your car, you can still refinance the loan, but it’s going to cost a little more.
You’ll need to pay off the lienholder (if there is one), and if the vehicle has an outstanding loan balance, you’ll need to pay it off as well.
To do that, you’ll need to come up with a lump sum of cash or borrow money.
If you’re willing to put down 20% more than what’s owed on your current vehicle and there are no other liens against your car, then lenders may be able to help.
If not, then you’ll have to find another way around it. That might include borrowing from friends or family members, taking out a personal loan, or even getting an auto title loan from a payday lender.
However, all of these options will be expensive and risky for business owners who want to keep their credit scores high.
Different ways to get money from your car after an auto loan refinance
There are many ways to get money from your car after an auto loan refi. You can list the car on Craigslist, trade it in at a dealership, or even donate it to charity.
There are several factors that go into deciding which way is best for you.
If you’re donating your car, do you have any personal belongings in the vehicle? Is there anything else that would need to be removed from the vehicle?
This will help determine if this is the best route for you.
If listing your car on Craigslist is what you prefer, then set a time and date for when the listing will be up, and make sure to include pictures of all aspects of the vehicle; interior and exterior.
Be honest about any flaws with the car. Don’t forget to include features like fuel efficiency, body style, color, etc. Include a price range as well so potential buyers know how much they should offer for the car.
Include information about why you’re selling the vehicle: maybe you want something bigger or newer.
Make sure to add contact information so people know how to reach you if they are interested in purchasing your used car!