People have all kinds of questions about auto loans, many of them related to their options. This leads to a logical question: Can I refinance my auto loan?
The short answer is, "Yes." Refinancing an auto loan is generally an available option, and Visions can help. Whether it's right for you or your vehicle is another question.
The fact is, refinancing may not be appropriate for everyone. For example, if you have a low credit score or your car is worth less than what you owe (this is known as being "upside down"), it may not be the best move.
As with any loan, you will want to do your homework and crunch some numbers. Look up the value of your vehicle at www.nada.org, check interest rates, and calculate payments.
Also, like any other time you want to finance a vehicle, you'll need to submit a loan application. Your lender will determine your approval based on the information in your application.
What are some reasons to refinance an auto loan?
Like any financial decision, you want to have a good reason. Refinancing an auto loan is no exception. Here are some potential, positive reasons to consider:
- Interest rates have dropped – Let's face it: when it comes to auto loans (or any loan), people like lower interest rates. Depending on your situation, you could enjoy some serious savings with an interest rate that's lower by even a point or two.
- You have a higher credit score – Maybe your credit wasn't that great when you needed your last car but you've been working on improving it. In general, a better credit score means a better rate. Refinancing an auto loan could be a great opportunity to take advantage of a more attractive interest rate.
- You've experienced a bump in the road – Life is unscripted. Things happen. If your financial situation has taken a hit, refinancing for a longer term might be a way of lowering your monthly payments. Keep in mind, however, that lengthening your loan term could impact the cost of interest payments over time.
Weigh the benefits and other considerations.
Before you make a decision on refinancing, take some time to understand your options and how they could potentially affect you down the road. Weighing the costs and benefits will help assess whether refinancing is right for you.
Finally, don't forget that it's not just the money that's there when you need it – we are. If you have questions about your finances or refinancing an auto loan, we'd love to help. Start your application below or discuss your options with one of our lending experts.
