Chrysler vehicles are renowned for their reliability and the value for the money they offer to owners. However, with the constantly increasing prices, it’s not uncommon to feel uneasy about your Chrysler car loan, especially if you discover that you’ve been overcharged and are burdened with expensive monthly payments.
Fortunately, there’s a solution: Chrysler refinancing. This option allows you to replace your current costly loan with a new one, typically offering a lower annual percentage rate (APR). By working with a new lender, you can secure a more affordable loan that pays off your existing one, relieving you of the financial strain.
Depending on your personal financial profile and the lender you choose, you can save a minimum of $80-150 per month or even more. Refinancing with the right lender can significantly reduce your interest rates and potentially save you up to $1850 annually.
History of Chrysler Capital
Chrysler Capital, previously owned by Cerberus Capital Management, used to be Chrysler’s financial services division responsible for financing Chrysler leases and loans and assisting dealerships with inventory financing. After being acquired by TD Bank in 2010 for $6.3 billion, the company was rebranded as TD Auto Finance in 2011.
Currently operating under FCA US LLC, Fiat Chrysler has established a new comprehensive finance provider, Chrysler Capital, which facilitates car purchases through loans and leasing. Their primary target audience is American car shoppers with good credit (prime credit).
On average, the auto loan interest rates offered by Chrysler Capital are around 8%, with some variation based on credit scores. By utilizing the Chrysler Capital auto loan calculator and completing a simple credit application, you can easily pre-qualify and gain insights into potential savings from a Chrysler Capital auto refinance, including the best available interest rates.
Why Should You Refinance Your Chrysler?
Whether you obtained financing for your loan through a bank, a dealership, or Chrysler Capital, you might feel the need to lower your APR. Moreover, the rising economic prices could be impacting your finances, leading you to explore options for cutting expenses.
If you have an excellent credit score and a consistent payment history, refinancing your Chrysler vehicle can lead to substantial long-term savings. Here are some potential advantages:
- Reduce your Chrysler interest rate: Just a 1-2% reduction in your interest rate can save you thousands of dollars over time by decreasing the interest charges on the principal amount.
- Reduce your monthly payment: Enjoy more monthly savings that can be allocated towards other financial obligations like student debt, mortgages, household expenses, and more.
- Change co-borrowers/co-signers: Refinancing enables you to include a sibling, parent, or spouse as a co-borrower or co-signer, helping you expedite the loan closure process and manage repayments more effectively.
- Enhance loan benefits: Access additional benefits for your Chrysler loan, such as GAP insurance, Vehicle Service Warranty, and other forms of vehicle protection.
- Cash-out refinancing: If you require funds for a financial emergency, cash-out refinancing allows you to obtain a loan based on the current resale value of your Chrysler vehicle.
- Purchase your leased Chrysler: At the end of your lease term, you have the option to buy out your Chrysler vehicle.
When Should You Refinance Your Chrysler?
The ideal timeframe for refinancing a car is typically 12-18 months after obtaining the loan. However, there are several other factors you should consider before committing to a refinancing agreement:
- A minimum of 6-12 months should have passed since you obtained the original loan.
- Your credit score should have improved compared to when you initially applied for the loan.
- You should have established a consistent payment history and resolved any outstanding dues.
- You may anticipate a forthcoming financial strain and aim to save money for the future.
- You desire to modify the loan terms, such as adding a co-signer or co-borrower.
Which Chrysler Models Can You Refinance?
Nearly all Chrysler models available in the current market can be refinanced. Some of the well-liked models in the United States include:
- Chrysler 300
- Chrysler Pacifica
- Chrysler Voyager
- Chrysler 200
- Chrysler Town and Country
Things to Consider Before Refinancing Your Chrysler Capital Auto Loan:
Before considering refinancing your Chrysler Capital auto loan, assessing your current loan balance is important. To get a better understanding of your current loan, you will need to retrieve your Chrysler Capital loan payoff statement. This statement provides key details, including:
- Payoff Amount: This represents the balance remaining on your loan, typically including the loan amount plus nominal fees.
- Payoff validity period: The statement specifies the due date until the payoff amount is valid to avoid late fees. This duration is usually around 10 days from the date of request.
- Per-diem: This indicates the daily interest accumulation on your loan.
- Account number: The new lender will require your account number to process the payoff.
- Payoff address: The statement includes the address to which the new lender should send the payoff check.
Having accurate payoff information at hand will empower you to make an informed decision regarding loan refinancing. It is essential to note that while high monthly savings may seem appealing, it is important to consider various refinancing nuances before proceeding.
How to refinance your Chrysler Capital auto loan
To reduce your monthly payments on your Chrysler Capital auto loan, it is important to find a lender that can either extend the term of your used car loan or provide lower auto loan rates compared to your current loan. The most convenient approach is to utilize an online application that provides an immediate annual percentage rate (APR) quote. Generally, lenders offer lower rates than your existing auto loan for one of two reasons:
- The rate on your original loan was marked up by the participating dealer, which is a common practice during auto loan origination to generate additional profit.
- Your credit has improved over time, making you eligible for a lower car payment and interest rate.
If you have improved your credit from the prime credit range (around 680-720) to the super prime credit range (above 720) and are not experiencing financial difficulties, you have the potential to save a significant amount of money, especially if you use your car for personal purposes.
Super prime credit members are highly valued by credit unions, which operate with a community charter, hold FDIC approval, and prioritize delivering exceptional customer experiences. As non-profit institutions, credit unions offer the lowest possible interest rates, making them an ideal choice for borrowers with super prime credit scores.
7 Easy Steps to Refinance Your Loan:
To refinance your Chrysler Capital auto loan, you can follow these 7 steps:
- Determine the amount needed to pay off your current loan.
- Assess whether you have positive or negative equity in your vehicle.
- Compare the interest rates offered by various lenders or seek assistance from a refinance broker.
- Calculate your new interest rate and monthly payment by utilizing online tools or consulting with lenders.
- Complete the necessary paperwork required for the refinancing process.
- Settle your existing loan by making the full payoff amount.
- Establish automatic payments with your new lender for convenient monthly payments.
What Documents Are Needed For Chrysler Refinancing?
Before approaching different lenders for refinancing, it is essential to gather and prepare the following details and documents. These will streamline the refinance process and increase your chances of qualifying for the best interest rates.
- Credit score: Strive for a credit score above 650 to secure favorable rates. However, having a score exceeding 700 will provide access to better rates and facilitate pre-approval.
- 14-day payoff amount: Contact your current lender and request the remaining loan balance, which includes the principal and interest due within the next 14 days.
- Loan-to-value ratio: Assessing the LTV ratio will determine if you owe more on the car loan than the vehicle’s current value. Being “upside-down” on the loan can make refinancing more challenging.
- Remaining loan term: Ensure that you have at least one year left to repay your existing loan for the refinancing to be effective.
- Prepayment penalty: Verify that your current loan provider does not impose any penalties for early loan repayment.
Additionally, be prepared with the following details:
- Vehicle details: VIN (Vehicle Identification Number), title, registration number, and mileage.
- Income information: Provide salary slips, pay stubs, and tax returns to demonstrate your financial stability.
- Personal information: Have your driver’s license and Social Security Number on hand.
How much does it cost to refinance?
Refinancing your Chrysler Capital auto loan theoretically doesn’t involve any costs. There are no early repayment fees; the only charge is the Department of Motor Vehicles (DMV) fee for changing the lienholder on your vehicle title.
However, it’s important to note that when choosing a refinance lender, there may be additional (hidden) fees of up to $449. To understand the cost associated with refinancing your Chrysler Capital loan, it is advisable to refer to a comprehensive comparison of refinance lenders.
Will Refinancing Affect Your Credit?
Refinancing typically does not have a negative impact on your credit score. You can verify this by examining the factors that determine your credit score. These factors include:
- Number of Hard Inquiries (less is better)
- Age of Credit history (more is better)
- Credit Card Utilization (less is better)
- Total Accounts (more is better)
- Derogatory Marks (less is better)
- Payment History (more is better)
If you receive a refinancing offer for your Chrysler Capital loan, it does not have a negative impact on any of these factors. Lenders are not required to perform a thorough credit check or impose an application fee when presenting you with a solid refinancing proposal.
What are Current Refinance rates?
Have a look at the Chrysler Capital refinance rates:
|Credit||New car||Used car|
The interest rates for Chrysler Capital car loans can vary significantly depending on your credit score. However, regardless of your location within the United States, whether it’s Hawaii, Maine, Alaska, or Florida, the rates offered by Chrysler Capital remain consistent.
How can I determine if my Chrysler vehicle is eligible for refinancing?
Lenders usually have relatively lenient eligibility criteria for refinancing. However, it is crucial to ensure that your vehicle’s registration, licenses, and other documentation are in proper order. Here are some common factors to consider:
- Age of the car: The vehicle should generally be less than 10 years old (specific age limits may vary among lenders).
- Mileage: The mileage on the vehicle should generally be below 125,000 (mileage requirements can vary depending on the lender).
- Valid driver’s license: You must possess a valid license.
- Valid registration: The vehicle should have a current and valid registration.
- Consistent payment history: Demonstrating a consistent payment history on your current loan is important.
- Verifiable income source: Lenders typically require proof of a verifiable and stable source of income.
- Full coverage insurance: Having full coverage insurance on the vehicle is typically required.
Is it possible to refinance your Chrysler Capital loan with the same lender?
No, refinancing a Chrysler Capital loan with the same lender is not possible. Chrysler Capital typically follows one of two approaches with your loan:
- They retain the loan, allowing them to generate profit throughout the loan term as you continue to pay interest.
- They sell the loan to an institutional investor or the public through securitization, enabling them to realize an immediate lump sum profit.
In both scenarios, the institution holding your loan relies on your monthly payments for expected cash flow. Refinancing alters this expected cash flow for Chrysler Capital, impacting its overall financial performance. Consequently, Chrysler Capital does not permit the refinancing of car loans if you currently have your loan with them. Instead, you must seek a new lender that offers a lower interest rate.
Can You Refinance A Chrysler With Bad Credit?
Yes, it is possible to refinance a car even with a poor credit score. However, it is generally not advisable due to the challenges and trade-offs involved. Bad credit refinancing is typically intended for individuals with a history of bankruptcies, repossessions, defaults, or late payments on their credit records.
When refinancing with bad credit, you may need to make certain compromises, such as:
- Providing a larger down payment when refinancing.
- Seeking a co-borrower or co-signer to strengthen your loan application.
- Searching for lenders who specialize in providing loans to individuals with bad credit.
- Accepting a higher Annual Percentage Rate (APR), which could impact your long-term savings.
Does Chrysler Capital give a grace period?
Chrysler Capital’s policy allows for a grace period of 7 to 15 days for late payments. The specific duration of the grace period can vary among lenders, and many banks have shown increased leniency toward borrowers during the coronavirus pandemic.
Late fees can vary significantly depending on the loan, with the minimum late fee observed being 5% of the monthly payment amount. However, we strongly recommend refraining from exploiting Chrysler Capital’s grace period unless you have a genuine emergency. Doing so could jeopardize your credit and have long-term adverse effects on your personal financial situation.
How long does it take Chrysler Capital to reclaim my car?
The timeline for Chrysler Capital to initiate vehicle repossession can vary depending on the state and specific contractual agreements. Generally, it ranges from 3 to 5 months after you have ceased making payments on your Chrysler Capital loan.
The terms of the individual retail and installment contract, which you signed when obtaining the car and loan, specify the conditions that constitute a default. In certain states and contracts, repossession can be triggered as early as 45 days (or a month and a half) after defaulting.
Default occurs when you have stopped making payments and have outstanding Chrysler Capital late fees. Simply catching up on missed payments to bring your account up to date may not automatically remove you from default. To no longer be considered in default, you must repay the full amount owed to Chrysler Capital, including any associated fees.
Frequently Asked Questions:
Here are some frequently asked questions about refinancing Chrystler Capital auto loan:
Do Chrysler Cars Benefit From Cash-Out Refinancing?
Although it is possible to refinance your Chrysler vehicle and receive a cash-out amount through certain lenders, Chrysler Capital does not offer this option. But you can compare interest rates and terms offered by various other lenders to find the most suitable option for your needs.
Does Your Chrysler Car Loan Interest Qualify for a Tax Deduction?
If you are using your Chrysler car for personal purposes, the interest on your car loan is not eligible for tax deductions. However, if you obtained the loan for commercial purposes, the interest paid can be deducted from your taxes. In cases where the Chrysler is used for both personal and commercial reasons, you may be able to claim a portion of the interest as a tax refund, considering the business-related usage.
Can I refinance my Chrysler vehicle more than once?
While there is technically no limit to refinancing your Chrysler, it is generally not advisable to do so multiple times. Each refinancing can negatively impact your credit score, taking several months to recover, and frequent refinancing may indicate financial irresponsibility to lenders.
If you are considering purchasing or leasing a Chrysler vehicle and can visit an authorized dealership, Chrysler Capital financing can be a favorable choice, particularly if you are eligible for 0% financing. However, it’s important to note that meeting specific credit requirements and other criteria is usually necessary to qualify for the most favorable terms.
In this article, we have discussed each and every detail related to refinancing your Chrysler capital auto loan. You can get all the information to ease your decision-making. Please let us know if you find it useful in the comments below!