5 Questions to Ask When Refinancing Your Auto Loan
A car can be a major expense, especially if you pay a higher rate than what the market is offering these days. If you're concerned about the amount of money you're spending on your vehicle every month, consider options to help you refinance your auto loan in Las Vegas.
Here are five questions you should ask if you're considering this process:
Have You Improved Your Credit Score?
Lenders look at those ever-important numbers. If you've been working diligently to improve your credit rating, you might be in a prime place to refinance your auto loan in Las Vegas. The better your score becomes, the lower your potential interest rates will be, so hard work definitely pays off when you're looking for a way to pay off your auto loan quicker. The better your score – the lower your payment.
What Are the Terms of Your Current Loan?
To make sure refinancing makes sense for you, you need to fully understand the terms of your existing loan. Make note of the difference between the purchase price and the financed price of your car. Understand the way your interest rate, monthly payments, and possible pre-payment penalties could affect any new financial agreement. If you're unsure what your terms mean, consult with a professional before you refinance.
How Long Do You Plan to Keep Your Car?
If you're planning to sell your car in the next six months, refinancing may not be the best option. However, if you'll have your car for the next three years or more, you may realize substantial savings if you refinance your vehicle. Time is money, so the longer you keep your car, the more money you may save in the end.
Will Your Existing Loan Qualify?
Generally speaking, larger financial institutions are more likely to consider auto refinancing for loans valued at greater than $10,000. Principle balances less than this amount won't save you much money as a consumer, and financial institutions are more apt to invest in larger loans. If you're holding onto a loan of $10,000 or less, you might want to find ways to rearrange your current budget to pay down the principle of your loan quicker. Non-profit credit unions usually do not consider a minimum size of the loan when reviewing a borrower’s application.
Will Your Car Qualify?
When you refinance your auto loan, your car becomes the lender’s collateral. If you're trying to refinance an older model, excluding a classic car, the value of the car may be greatly diminished. Vehicles with high resale value (i.e., lower mileage and minimal damage) are more likely to be viewed as optimal items that a financial institution would consider backing when it comes to an auto loan. The total mileage on a vehicle can also affect its value when re-financing. Kelly Blue Book or the NADA car pricing guide can help you understand your car's worth.
Are you ready to refinance your auto loan in Las Vegas? Our team at Clark County Credit Union is here to help. Get started by applying for your auto loan today or call 702-228-2228 and select option one.
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