Dear EchoBay Expert:

Dear Loyal Reader: Yes, it can definitely be worth the effort, especially since the time needed to complete an application online through a bank, credit union or online lender is minimal. The application process is much simpler than applying for mortgage refinancing, takes less than five minutes and you generally will get notification of approval within minutes.

With auto refinancing rates at their lowest in years, it is quite possible you could save money by refinancing. If the current rates are lower than what you are paying or if your credit has improved significantly since you took out your original loan, it is definitely worth your while to look into refinancing.

You could save money each month on your payments as well as the overall interest you pay on your loan. Even if you can't get a much lower interest rate, you can still save on your monthly payments by extending your loan term. Auto refinancing loans generally do not have any fees associated with them either with the exception of a state mandated lien holder change fee which ranges from $5 to $65 depending on where you live.

As you can see, five to ten minutes of your time could result in saving hundreds of dollars. The savings makes it worth the effort in my book.

Dear EchoBay Expert:

Dear Loyal Reader: It depends! With fixed rate auto refinance loans, your risk is eliminated. Your rate is fixed along with your payment schedule and amount. There will be no surprises down the road. However, with a variable rate loan, your interest rate can vary greatly over the term of the loan, which means your payment can as well.

There are several questions to ask about variable rate auto refinance loans.

1. What is the interest rate cap?
With variable rate loans, there is generally a cap in place, which means the interest rate will never increase over that percentage. Calculate your payment at the highest possible interest rate - can you still afford it?

2. What is the minimum interest rate?
The minimum is also sometimes referred to as the floor rate. This is the lowest your rate can ever be. Calculate your payment with this rate and compare it to the payment of the fixed rate loan. Is there a big difference?

3. Future of rates.
Possibly the biggest deciding factor is a guess as to what you believe interest rates may do over the next three years. If your forecast that rates will rise, you may be better off with a fixed rate loan. But if you believe rates will stay relatively constant or will decrease, a variable rate loan can save you quite a bit of cash over three years compared to a fixed rate loan.