Should I Refinance My Car Loan?
Are you dissatisfied with your existing vehicle loan? Perhaps it's time to think about refinancing. The concept of car loan refinancing is straightforward: you take out a new loan to pay down the sum on your old auto loan. It might be difficult to determine whether or not to refinance a car, but if you approach it correctly, and ask the right questions, you'll be able to make the best decision for you. In this article we'll look at if and when it might may sense.
If You Want Lower Monthly Payments
The majority of people seek auto loan refinancing to lower their monthly payments. This is understandable, considering vehicle loan payments can impact monthly spending. However, your monthly payment is one of many considerations when refinancing.
You have three possibilities for decreasing your vehicle loan monthly payments: decrease your interest rate, extend your loan term, or both. Increasing the number of months you spend on your vehicle is the best way to dramatically cut your auto loan payments. However, if you extend your loan term, you may pay more for your vehicle than if you did not. However, suppose your lender allows you to extend your loan term and provides a lower interest rate. In that case, you can lower your monthly payments and pay less overall for your vehicle.
If Your Credit Score Has Improved
Your credit score is essential in vehicle financing since auto lenders filter applicants based on credit levels. Your credit tier is mainly affected by the rate you obtain and whether or not you are given an offer. Suppose your credit score has grown since you first acquired the vehicle, and if you've bumped up a level, you should be able to get a better financing arrangement. Obtaining a lower APR might save you a significant amount of money in interest over the duration of your loan. For instance, refinancing $30,000 from a 7% rate to 5% with a couple of hundred dollar monthly payments will save you roughly $1,600 in interest.
If You Want to Try For A Better Interest Rate
While it is related to the goal of reducing monthly payments, some refinancing consumers prioritize lowering their loan interest rates. You may be able to obtain a new loan with a lower interest rate if you’ve improve your credit score while repaying your current vehicle loan. Lowering your interest rate may reduce the total interest you pay on your vehicle loan, provided your loan length is not increased or extended by too many months. A slight shift in interest rates could save you money over time.
If You Want to Pay Off Your Loan Early
If your income has increased since purchasing your vehicle, you may want to consider refinancing your vehicle loan to a shorter term and reduced interest rate to pay it off quicker. Of course, you might pay more on your existing auto payment, but refinancing may enable you to send more of those dollars to the principal, resulting in even more significant savings.
If There is a Better Deal
When shopping for vehicles, you probably had a different goal, such as seeking a dependable vehicle to transport your children to football practice or just desiring a safer vehicle. You may have disliked looking around for better loan terms and just accepted the first loan you were offered. If you didn’t look into this on the front end, now is the time. Start conducting your research today and see if you can get a better offer.
Ready to Refinance?
We hope this article has been helpful and informative to you! If you’re ready to refinance your car loan, we’re here to help. So whether you’re looking to refinance your current loan or purchase a new vehicle, the time is now! Take advantage of our low rates today by applying at 201 Ohio Avenue in Charleston or applying right here on our website.
*Loans are subject to credit approval. Advertising of this promotion does not represent a loan approval or commitment to lend. Additional loan restrictions may apply. Actual rate and terms based on individual credit standing. Auto rates are subject to change. MCWVFCU reserves the right to change details on the promotion offer, extend the promotion, or end the promotion without prior notice being made to the public and participants and to number the qualifying transactions performed during the period. This offer cannot be combined with any other offer. Does not apply to recreational, real estate, personal, or other business loans.