Is Auto Loan Refinancing Right for You? 3 Details to Consider
If you have concerns that the interest rate for your current auto loan is too high, or find that your current auto payment is too expensive, refinancing your vehicle loan is a smart option to consider. Auto loan refinancing is an easy, straightforward process that usually only takes a few days. There are a few factors to consider when deciding whether to pursue new auto financing.
Things to Take into Account When Preparing to Renegotiate Your Auto Financing
The Current Interest Rate Climate
Pull out your paperwork from your original auto financing to check your interest rate. If interest rates have gone down since you closed on the loan, refinancing your loan is a simple way to reduce the amount of interest you pay over the life of the loan. Typically, there are no costs associated with auto financing. This means you won't have to factor in loan fees or closing costs when deciding whether you should refinance your vehicle.
Your Credit Score
When lenders decide what interest rate to offer you for your auto loan, one of the main factors they use is your credit score. If your credit score needed work when you applied for auto financing, your interest rate likely reflects this. You can improve your credit score with responsible financial habits, like making your loan payments on time and decreasing your utilization of revolving credit lines. Once your credit score starts to recover, you should see how this increase affects your auto financing options. Refinancing your auto loan permits you to take advantage of your efforts to improve your credit score
The Affordability of Your Current Payment
Should you find you struggle to make your monthly auto loan payment, refinancing your loan is one way to reduce your payment. There are a couple of ways new auto financing can lower your payment. If interest rates have decreased since your initial loan, or if your credit now qualifies you for a more affordable rate, this will help lower your monthly payment. When refinancing, you also have the option to extend the term of your auto loan.
If you're ready to pursue new auto financing, contact Clark County Credit Union at 702-228-2228 today to explore your options.