MCLEAN, Va.–(BUSINESS WIRE)–According to a new survey from Capital One Financial Corporation, 61% of Americans who currently have auto loans do not know the interest rate they are paying. This means consumers may be paying more than necessary and could save money by refinancing their loan to get a lower interest rate and a lower monthly payment.
“Simply put, a lower interest rate means lower monthly payments and long term savings,” said Sanjiv Yajnik, President of Capital One Auto Finance. “By reducing the interest rate on an auto loan by a percentage point or two, consumers can save money on their monthly bills that can add up to a significant amount – hundreds or even thousands over the life of the loan. Knowing your current interest rate is the first step in determining if refinancing is a good option for you.”
The amount of money consumers can save by refinancing their auto loan depends on many factors, including the current interest rate, loan balance and the individual’s credit rating.
Capital One Auto Finance recommends that consumers consider the following criteria before deciding to refinance their auto loan.
Look out for prepayment penalties. Determine if your current auto loan has any penalties for paying off the loan early. This will impact how much you can save from refinancing.
Check your credit score. Your interest rate will depend on your credit score. Get a free copy of your credit report at www.annualcreditreport.com and opt to see your credit score. Make sure your credit report is accurate and report any inaccuracies to one of the major credit bureaus.
Beware of lender fees. Capital One Auto Finance charges no application, origination or early termination fees. If your lender charges any fees to process your loan, consider applying with a different lender.