Refinancing Your Vehicle
Refinancing Your Vehicle
Posted on August 5, 2023
Are you looking to lower your car loan interest rates? Well, refinancing your car loan may help you get there depending on a couple of factors. First, if you’ve previously had little to no credit, or poor credit, it’s worth looking into refinancing your car loan after a few years. The most significant benefit is that you’ll be able to pay off your car loan much faster.
What is Refinancing?
Refinancing your car loan is getting the lender to update your credit results for a new interest rate, almost as if you’re buying your car all over again. However, the price of the car is non-negotiable. The amount left owing on your loan is what your new interest rate will get approved for. The lender will then issue a new contract for your vehicle and pay off your owing balance.
Can I Refinance My Loan?
Like your loan right now, refinancing your vehicle will involve the same steps. You will have to get re-approved based on your credit. You will need a source of income, a minimum credit score/credit history to show and a legal address of residence.
Refinancing Benefits
In some cases, you can earn cash back on your loan. For example, with the right deal and lower interest rates, you may be able to profit from refinancing your vehicle.
If you had a co-signer to help qualify for the loan, this is also an excellent opportunity to remove them. You can also use this to add a qualified buyer onto the loan if they were unqualified at the time of purchase.
You will also be able to extend your loan term, which will make your monthly payments smaller. Be sure to talk to your advisor about any other incentives.
Should You Refinance Your Loan?
Be sure to do your research. Look into all your options before committing to any new deals. Look into the current industry interest rates to help keep your budget low. Having a shorter-term plus low-interest rate is an indicator of a good car loan.
If you have any other questions or are looking for a little more guidance, check out the rest of our blogs on our website or talk to one of our advisors today. Then, choose 401 Auto for your next purchase.
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