Today might be the perfect day to consider auto refinancing
Lower interest rates can mean lower monthly payments.
You need your car to get around…for work, for fun, for just about anything. But paying for your car loan can eat up a big chunk of your monthly take home pay. One bit of good news is that you might be able to refinance your loan at a lower interest rate. That means you’ll have lower monthly car payments and more money on hand for fun stuff…or for paying off other debt or saving for retirement. You get to choose what to do with that money, something other than paying high interest on your car loan.
Consider this: If your car loan interest rate drops by just one point, you might be able to save a decent amount of money each month, depending on the amount you have borrowed. Use an auto refinance calculator to find out how your current auto interest rate could change if approved for refinancing at a lower rate. If you can get a rate that is a point or more below what you have now, look into refinancing.
How do I determine whether I can save money with lower auto refinance rates?
It’s fairly easy to determine just how much money you can save. Use an online auto loan calculator to experiment with different values. First look for your current loan information on your monthly statement from the company providing your auto financing. This includes how much you owe, what your interest rate is, what your monthly payment is and how many payments you have remaining. Put this information into the calculator and it will verify your current monthly payment.
Now put in a few different auto refinance rates to calculate just how big your savings might be. Generally, if you can get a rate that’s at least one percentage point lower than you’re paying currently, refinancing is worth considering.
Why might I see different rates than I’ve seen in the past?
Many things may have put you in the situation you’re in. For example, you had bad credit (poor credit score) at the time you bought your car. Or you didn’t have time to shop around for the best company and the best rate for your needs. Whatever the reason, if approved for auto refinance, you may be able to alter your current situation.
Isn’t auto loan refinancing complicated?
No, car loan refinancing is actually pretty easy. Unlike refinancing a mortgage, you don’t have to have an appraisal or inspection. Generally you can do all the work pretty quickly online…and it isn’t much work.
- Do your research.
- Estimate your potential savings
- Compare any fees, limitations or restrictions.
- Complete an application and get a response in a few minutes.
In many cases, the application won’t have a fee. Even if your credit isn’t as good as you’d like it to be, some companies specialize in providing loans to people with poor credit.
Think of the situation this way: You could spend money on a lottery ticket every month and hope for a big win. Odds are that won’t happen. Instead, check out auto refinancing rates and you might be able to set up a big savings every month on your car payment.