If you have an auto loan on your new car, then you would be interested in lowering your annual percentage rate (APR), which is how much you have to pay per year. Lowering the APR on your car loan can save you hundreds of dollar each year in interest charges. Here are a few tips to help you lower your APR rate.
1. Have Good Credit Rating
To lower your APR, you need to have a good credit rating and a steady job. If you have a good credit rating with steady income, then you would have to pay small installments and you would have a lower APR. On the other hand, if you have an unsteady job or a bad credit rating, then you would have to pay bigger installments with a bigger APR.
2. Refinance Auto Loan
Halfway through your loan you may apply to refinance the auto loan. If you have been able to stay current with the auto loan, and have a strong income record, the bank will work with you to refinance the loan for a lower interest rate.
3. Use Home Equity Credit
You can lower your APR by securing a loan through your home equity line of credit. This will help you to pay off the current loan with the high interest rate, and then only pay on the amount that is left over.
4. Pay on Principle
Each month you can help your yearly APR by paying extra on the principle of your loan. This will lower your total cost and cause the loan to be renegotiated at a lower rate.