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Reduce your monthly payments with Alabama auto refinance
Nothing causes more heartburn to Alabama car owners than high auto loan payments. With average payments in the country rising above $600/month, you need to look out for yourself! That’s where Alabama auto refinancing can help you.
You can get benefits like:
Lower your Annual Percentage Rate (APRs)
Lower your monthly car loan payments
Add or remove co-signers or co-borrowers to your loan
Take a payment vacation or defer your payment
Extend or shorten your loan term
Buy out your car lease at the end of the term
Choose bi-weekly payments and hardship plans
Auto Refinance in Alabama – Unlock savings on your auto loan
If you bought your car through bank or dealership financing, you could’ve been overcharged on your Alabama auto loan. You may not have had a good credit score to bargain with them and might’ve signed on for a high APR.
If you’re stuck in such a ‘bad’ car loan with expensive monthly payments, Alabama auto refinancing is one of the easiest ways to save money.
Auto refinancing in Alabama can help you take on a new loan to replace your existing, expensive loan, saving you hundreds – if not thousands – every year.
The new lender will typically sign you on for a lower APR, which means more affordable payments. They will also pay off the loan balance with your current lender to free you from the contract.
The biggest benefit of refinancing is choice. You can choose from various refinance lenders instead of signing up for the first deal you get.
See what you could save on auto refinance
Why Should I Refinance My Alabama Auto Loan?
Buying and maintaining a car in Alabama is not easy, that’s for sure. Dealers and banks are quick to lock you into high APRs so that they get their commissions. However, refinancing helps you rectify any mistakes you may have made when taking the loan!
Refinancing your Alabama auto loan can have the following benefits:
Get lower APRs: Reducing your interest rate by just 1-2% can save hundreds yearly.
Reduce your monthly payment: You can use the money saved for more important expenses like your mortgage, student debt, personal loans, etc.
Add or remove a co-borrower/co-signer: Want to repay your loan faster? Get a parent, sibling, or spouse as a co-borrower and pay off the loan quickly.
Get cash-out refinancing: If you need cash for an emergency, put up your car as collateral with cash-out refinancing.
Include more benefits in your loan: Add Guaranteed Asset Protection, Extended Warranty, and other benefits to your refinanced loan.
Buy out your lease at the end of the term.
How Much Can You Save Through Auto Refinance in Alabama?
The exact amount saved by each individual depends on their credit profile and other factors like:
Credit score
Loan amount
Loan term remaining
Age of vehicle
However, those who refinanced their auto loans in Alabama have reduced their APRs by at least 1-2% lower than their current APR and save up to $1850 annually.
Your estimated monthly loan payment is
$684.10/mo
Monthly savings
$55.90
Difference in interest
$2683.20
When Should You Refinance Your Alabama Auto Loan?
Wondering what’s the right time to refinance? Ideally, you should meet some of the following criteria:
Have at least 6-12 months passed since the start of your current loan?
Has your credit score increased above what it was at the start?
Do you want to reduce your monthly payments and save money on your auto loan?
Do you want to get rid of certain terms/clauses in the auto loan?
Do you want to add/remove a co-signer or co-borrower to your loan?
What Documents Do You Need to Refinance Your Auto Loan?
When applying for the best auto refinance rates in Alabama, it’s best to keep all the official loan documents ready. Here’s what you need:
Personal Financial Information
Driver’s License Aim for a credit score above 700 to get the best refinance deals.
Credit score: Ideally, try building your score above 700 to get the best rates. Having a score above 650 will get you good-to-moderate rates
Social Security Number
Proof of Income: You can use pay stubs, bank statements, or tax returns as income proof.
Proof of Residence: Mortgage statements, auto insurance policies, utility bills, or property tax bills can serve as proof of residence.
Current Loan Information
14-day payoff amount: You can ask your lender to furnish you with the remaining loan balance, including the next 14 days’ principal and interest.
Car Loan-to-value ratio: The LTV will tell you if you are “upside-down” on your car loan (i.e., owe more than the car is worth). If you are, it will be harder to refinance.
Loan term remaining: Ideally, you should have more than a year left on your loan
Prepayment penalty: Some lenders will penalize you up to 2% of the loan balance if you close early.
Vehicle Information
Make and Model
Year (Age)
Title
Vehicle Identification Number (VIN)
Proof of Car Insurance
Auto Refinance in Alabama: Eligibility Requirements
Your car will be eligible for auto refinance in Alabama if it meets the following broad criteria.
The car is less than 10 years old (varies depending on the lender)
The car has a mileage of less than 150,000 (varies depending on the lender)
You have a verifiable income source
You have a valid driving license
You have a valid registration
You have full coverage insurance
You have a consistent payment history on your current loan
The criteria may vary depending on the lender. Ensure you consult with them before deciding to refinance.
Average Auto Refinance Rates in Alabama
LOAN TERM
Excellent
Credit Score
(750-850)
Good
Credit Score
(700-749)
Fair
Credit Score
(640-699)
Poor
Credit Score
(639 or less)
36 months
3.32%
4.39%
4.99%
7.57%
48 months
3.42%
4.91%
6.70%
9.72%
60 months
3.47%
4.77%
6.47%
9.52%
72 months
3.85%
4.72%
6.60%
9.62%
*The rates given above are averages: actual rates may vary based on credit scores, risk profile, payment history, loan balance, and more. Borrowers with excellent credit may get even lower rates than shown.
How to Refinance Your Alabama Auto Loan with Way.com
Step 1: Estimate your savings
First, use our online auto refinance calculator to determine whether refinancing can save you money. If you can save at least $50 every month, then refinancing is worth your while.
Step 2: Get multiple pre-qualified offers
The advantage of using a lending platform like Way.com is that you can pre-qualify with several refinance providers using a soft credit pull. So shop around, compare rates, and choose the deal that makes sense for you.
Step 3: Choose an offer and start saving
Once you choose an offer, apply formally by submitting the required documents. Be prepared for a hard credit inquiry from the lender. You can be approved within a few hours and receive funding in just 1-3 days!
How to Refinance Without Hurting Your Credit
Refinancing your car will cause a temporary drop in your credit score. However, you can reduce the magnitude of the drop in the following ways:
Rate shop within a certain window: Credit risk companies allow multiple inquiries to be clubbed together as one inquiry – if done for the same reason. It’ll help you avoid credit hits from multiple inquiries. VantageScore has a rate shopping window of 14 days, while it is 45 days for FICO.
Pre-qualify for offers using a soft credit pull: It can help you shortlist the best few offers and avoid multiple credit hits.
Check your credit score regularly: If you build your score to above 700, the credit drop will be significantly less.
See what you could save on auto refinance
Why our Alabama Auto Loan Refinance Program is great for you
At Way.com, we understand that it’s not easy to finance a vehicle in Alabama. You need all the support you can get to handle rising gas prices, insurance premiums, and monthly loan payments!
That’s why Way.com is simplifying car ownership across the country. Our AI-enabled fintech platform allows you to:
Find and connect to the best refinance lenders
Compare the best offers and choose the best
Include additional benefits like insurance, extended warranty, etc
Refinance even with bad credit
… and much more!
What is Way.com?
Way.com is the country’s leading car services marketplace and #1 auto super app, making car ownership affordable to millions of Americans. You can save more than $1500/year through our combined auto services like:
Way.com has a 4.5 rating on Trustpilot, with more than 3 million satisfied customers. The Way app also has a 4.7 rating on Google Play and 4.9 on the iOS app store.
Auto Refinance in Alabama: Frequently Asked Questions
Which refinancing brand provides the lowest auto refinance rates in Alabama?
The rates you are offered will depend on several factors – including the refinance amount, credit score, loan balance remaining, payment history, etc. A lender that gives you low rates may not do so for another individual with different criteria.
While there are many trusted lenders like Alabama Credit Union (ACU), OpenRoad Lending, and Alabama Central, you can find the lowest rates using a refinance aggregator like Way.com.
Will car repossession in Alabama hurt your credit score?
There will be a temporary drop in your credit score when applying for refinancing in Alabama. That’s because the lender will conduct a hard credit inquiry to check your credit-worthiness. However, you can easily build it back with consistent payments.
What is the 20/4/10 rule of thumb for car buying?
The 20/4/10 rule for car buying can help you avoid high loan payments. Ideally, you should follow these guidelines when buying a car:
Make a down payment worth 20% of the vehicle cost
A loan term not longer than 4 years
Spend within 10% of your gross income on transport/vehicle costs
What is a good APR for refinancing an Alabama car loan?
Don’t go with a preconceived notion of your preferred refinance rate. However, you should ideally get a lower APR than what you currently have, with a lower monthly payment. Aim for 1-2% lower than your current rate.
Can you negotiate car refinance rates in Alabama?
Yes, you can either try and negotiate a lower rate with your dealer, or sign up with a new lender who will pay off the remaining loan balance. In both cases, you’ll have more success if you build your credit score to above 700.
Do you find Auto refinance complex? Here is the ultimate Auto Refinance FAQ Guide with answers to all your questions!
Save up to $1850 per Year