When to Refinance Your Loan
Let’s face it — even the most financially responsible people need to take out loans at some point in their lives. Whether it’s to secure a dream home, pay for medical bills, finance a vehicle, or simply help overcome a financial hurdle, millions of individuals take out loans each year. Although this is often a necessary choice, you still have some financial control over the loan, particularly when it comes to refinancing.
Refinancing a credit union loan can enable you to lower your monthly payment and reduce the interest that you’ll build throughout the loan’s lifespan. Essentially, you’re taking out a new loan with more favorable rates to replace your existing loan. This second loan effectively pays off the first loan, leaving you responsible for only the new loan.
There are many different loans that an individual may take out for a variety of different reasons, including:
Which of these loans can you refinance? All of them, however, the most important factor in this equation is knowing whether or not you should refinance. Let’s look at each loan individually and determine when the right time may be to refinance it.
- Mortgage Loans
Technically, you can refinance your mortgage loan as many times as you would like. Some homeowners who wish to lower their mortgage payment from month to month may refinance their loan from a 15-year mortgage to a 30-year mortgage. Similarly, those who have more disposable income and wish to pay their mortgage off faster may refinance from a 30-year mortgage to a 15-year mortgage.
- Home Equity Loans
If you’ve built up equity in your home, you may choose to refinance your mortgage with a home equity loan. This is a wise option for homeowners who have significant equity in their homes and want to save by reducing fixed costs or plan to sell their homes in the near future.
- Auto Loans
Although it is not recommended that a car owner refinance their auto loan within the first year, those who are unhappy with their high-interest rate or wish to lower their monthly payment can choose to refinance. However, some auto loans include prepayment penalties, which may cancel out the potential savings earned through refinancing.
- Commercial Loans
Refinancing a commercial mortgage can be an option for commercial property owners, though it is not exactly the same as refinancing a private property. Lenders are able to refinance up to 75% of its current value, earn a lower interest rate and receive money that is tax-free to use on remodeling or repairs.
- Personal Loans
Those who have taken out a personal loan have the option to refinance. This is a good idea for those with high credit scores who consistently make timely monthly payments.
Is now the right time for you to refinance your credit union loan? Visit Clark Country Credit Union today, or call 702-228-2228. We will inspect your loan, assess your credit score, and help you determine if refinancing is right for you.