If your kids have cars and car loans, they might have difficulty getting good rates when refinancing. Naturally, you want to help them out. Here’s what you can do to get them a better rate when refinancing.
If the loan is already in your name, you don’t have to do anything special. Unlike insurance companies, lenders don’t care much who is driving the car, just who is paying for it. Just follow our regular advice for getting the best rates when refinancing your car loan.
If you aren’t currently on the loan, you might be able to help your kid get a better rate by agreeing to be a cosigner. When you put your name down as a cosigner, it reduces the perceived risk for the lender. After all, there are now two people who are obligated to make sure the car gets paid off, and two sets of assets to potentially pursue in the event the loan stops getting paid.
This is assuming, of course, that your credit is better than your kid’s.
Another way to help your child get a better rate on their car loan refinancing is to help them pay down the amount they owe on their current loan. If you do this, they will have a lower balance to refinance, which could help them secure a better rate for car loan refinancing.
As above, you might ask them to repay you as if this payment were a loan, but at a lower interest rate and under more favorable terms than a bank will offer.
Another problem that can make it hard for your child to get good interest rates is their bad credit, affected by having other bills overdue. Often the amounts necessary in these cases are relatively small, but they can make an outsized difference in the interest rate your child will receive when they choose car loan refinancing.
This might be a reason to let your child move back into your house. If rent is one of their largest expenses that they are having time keeping up with, having them move in for a short period of time could help them eliminate this default and rebuild their credit. They could also save up money to help them when they go in search of a new home after refinancing their car.
The truth is that loan terms are not always uniformly determined. Many lenders use their own strategies to determine what rates to offer a particular borrower. Often, characteristics like being young and not having a long credit history can make some lenders wary. Then they offer higher rates.
If you look around, though, you might be able to find lenders who don’t have a problem with your child’s age, short credit history, or bad credit. They can offer much better rates. One of the benefits of working with iLending is that your dedicated personal loan consultant will review our extensive network of national and local lenders for you. As part of this process, we’ll identify the best loan rates available to you and recommend the solution that provides you with the best possible terms. By shopping around for the best rates for your child, we are able to significantly reduce the hassles associated refinancing a car loan.
Of course, you can also just put them in touch with a personal loan consultant from iLending. Our loan consultants know how to find lenders who give better rates to borrowers with special circumstances. They can help you or your kid find the best interest rates for their car loan refinance, no matter their situation.
Our You First Approach™ is specially designed to remove the hassles from car loan refinancing, ensuring you have the best possible experience. Our personal loan consultants will listen carefully to you to understand your specific goals. We’ll then compare rates from an extensive network of local and nationwide lenders to recommend the best solution that addresses your needs.
It only takes a couple of minutes to complete a loan pre-application with iLending. Then you can get in touch with a personal loan consultant who will help you find the lenders ready to make you the best offer.
Contact us today to start the car loan refinancing process.