How Refinancing Your Auto Loan Can Help You Save
If your finances have become a tight squeeze lately and you need to free up some extra cash flow, refinancing your auto loan can help you save with a lower interest rate and lower payment. You could end up saving thousands of dollars in interest, and you may even be able to pay off your loan sooner. See if an auto loan refinance is right for you to help get your finances back on track.
Reduce Your Interest Rate
If your current interest rate is high and has you struggling to make your payments, refinancing your auto loan can help you save money. Especially if interest rates have dropped since you originally took out the loan, or if your credit score or financial situation has improved, as that will help you qualify for a better rate. Even if you haven’t had the loan for very long, consistently making your payments on time each month can significantly improve your credit, thus improving your chances of qualifying for a lower interest rate, so it’s definitely worth it to check.
Lower Your Monthly Payments
If your monthly payments have become difficult to make, refinancing can help you lower your monthly payments. Either by reducing your interest rate, or by lengthening your loan term. Extending the term of your loan means it will take longer for you to pay it off, but the cost of your monthly payments will decrease. A lower payment will help make your monthly finances more manageable. If you need to reduce your monthly payments now but don’t want to be stuck with a longer loan later, you can refinance now to get a lower payment, then increase your payment amount once your financial situation has improved. That way, you still get the benefits of a lower monthly payment when you need it, and you can pay off your loan when you can afford it.
Weigh the Benefits
As with any financial decision, it’s important to weigh the pros and cons to determine if refinancing your loan is right for you. There are some instances where refinancing may not help you save, so it’s important to carefully consider all factors before making the decision. For example, if you owe more money on your car than what it’s actually worth, it may be difficult to find a lender who is willing to refinance. Another factor to consider is if your current loan has any prepayment penalties. If your lender charges fees for paying your loan off early, that could possibly cancel out the benefits of refinancing. And remember, any late or missed payments while you are pursuing an auto loan refinance can hurt your chances of being approved, as well as damage your credit, so be sure to confirm with both lenders before stopping any payments. Use our financial calculators to help you estimate how much you can save by refinancing.
Are you considering refinancing your auto loan? Refinance and save with Robins Financial to drive home your savings. To find out how much you could save, give us a call or make an appointment at one of our convenient branch locations. If you’re ready to refinance, you can apply online today.