Should you consider refinancing your auto loan?
When you refinance a car, you are using a new loan to pay off an existing car loan. The refinanced loan is a new contract between you and the lender, with agreed upon terms like interest rate and loan duration, which determine your new monthly payment. Typically, the goal of refinancing is to lower your monthly payment, lower your interest rate, and/or reduce how much you spend in total over the life of the loan.
There are a handful of reasons to consider refinancing your auto loan:
You may have better rate options now.
Interest rates fluctuate as economic conditions evolve, so you may notice interest rates are lower than when you got your initial loan. There’s a chance you may have also missed getting the best rate during your original financing process if you weren’t aware of all your lender options.
Your credit score may have improved.
If your credit score is significantly better than when you originally applied for a loan, you may qualify for a lower interest rate, ultimately reducing how much interest you have to pay on the loan.
You may need to lower your monthly payment due to financial setback.
There are times when extending the life of your loan and reducing your monthly payment may be a necessity. If other expenses have increased, or your income has decreased, this could be a wise option; you would just be paying off your loan for a longer period of time.
You may be thinking about buying out your lease.
If you are currently leasing a vehicle and your lease term is almost up, you may want to consider buying your vehicle if you’ve kept it in good condition or kept your mileage low and would prefer to keep it.
You may want to remove a co-signer from your loan.
There are various reasons why you may no longer want or need a cosigner on your car loan, and refinancing may be the easiest method to ensure your new loan is under your name alone.
If you’re thinking about refinancing, but you still have questions about the process, give us a call at 888-436-1847 and we’ll be happy to help!
One more thing! If you refinance with NECU before February 28th, 2018 you’ll enjoy no payments for 90 days!
Interested? Apply online today!