Are you looking to refinance your car? Refinancing your auto loan can help lower your interest rate and save you hundreds of dollars in the long run.
Refinancing may be the right choice if your credit score has changed or if you qualify for a better interest rate. The process can be a great benefit if it's done correctly. Here are some do's and don'ts to consider:
1. Do shop for interest rates. Chances are that interest rates have changed since purchasing your vehicle. If interest rates are lower, it may be time to consider refinancing if you can get a lower interest rate. Shop around at various lenders to find the best refinance deal that will save you money.
2. Do consider refinancing if your credit has improved. It may be economically beneficial for you to refinance your auto loan if your credit has improved since first purchasing your car. The higher the credit, the better the loan deal you receive. So If you've paid your bills on time and haven't taken out multiple lines of new credit since your original loan, your credit score may be higher which will look good to auto lenders.
3. Don't extend the length of your loan. One of the options to auto refinancing is to extend the length of your loan. However, if you're looking to save money, don't go this route. While extending the length of the loan means lower monthly payments, it also means an increase in interest which increases the total price of the vehicle.
4. Don't refinance at the end of the loan term. It's true what they say; the value of the car drops as it drives off the lot. The older the vehicle, the less value it holds overtime, making it harder to refinance. Since you do pay most of the interest on the loan when you first purchase the vehicle, it is best to refinance at the start of the auto loan.
If you currently have a vehicle loan with another financial institution, we may be able to lower your monthly payment and help you save! Apply today or speak with our team to see if refinancing your auto loan is the right move for you.
