You may be able to save money on your current car loan by refinancing it. Refinancing a car loan is an easy way to lower the interest rate you pay on your auto loan, which can save you money over time.
Some lenders will even give you a discount on an existing car loan balance if you refinance with them! And if that wasn’t enough reason to refinance right now, there are other benefits as well. Let’s discuss what happens when you refinance a car:
You Could Lower Your Interest Rate
If you have a good credit score and income, refinancing your car loan could be the best decision for you. You can get lower interest rates with the right company. A higher income will help you qualify for lower rates on your monthly payment, which means that it may take longer to pay off your loan in total.
However, if you’re just starting as a new car buyer or if this is not your first time financing a vehicle, then it might make sense to consider refinancing with another lender who offers competitive rates and terms on vehicle finance deals.
You Might Reduce Your Monthly Payment
Refinancing is a great way to reduce your monthly payments. If you are paying more than the minimum payment, refinancing can help you save money.
To figure out if refinancing is right for you, calculate how much money you could save and compare that to the cost of refinancing.
You Are Changing The Original Terms Of The Loan
When you refinance your car loan, you have the option to change any of the original terms of your loan. You can change the term of the loan, which might mean extending it or shortening it.
You can also change the amount owed on your vehicle – this could mean paying off a big chunk of what is owed, or keeping things as they are. You might consider changing your interest rate as well.
You Might Need To Put Money Down
Picking a car is fun, but choosing how to pay for it can be stressful. There are many ways to finance a vehicle: you can lease, buy on contract or finance the vehicle through a bank or credit union.
You Could Change When The Loan Ends
In this case, refinancing your car loan could help you save money by changing how much interest you pay over the life of your loan.
You may be able to lower your monthly payment, extend the length of the loan or increase the credit score required to get approved for a new car loan.
You Can Get Better Customer Service
This is a great opportunity to get better customer service. A lender that offers refinancing may have more resources and experience in this area offering better experience. But even if they don’t, their loan officers will be more familiar and efficient with the process of reworking your auto loan.
This only applies if you’re doing business with one of the top service providers otherwise, there’s no guarantee. Experts like Lantern by SoFi say, “There are no hard and fast rules about when to refinance, and you may choose to follow this path as soon as you find a loan that meets your needs.”
If you’re serious about saving money on your car loan, then refinancing is likely the best option. You can save thousands of dollars and reduce your monthly payments by simply refinancing with a new lender.