When you rolled off the dealership lot in your new set of wheels, everything looked great. But maybe now your vehicle loan has started to feel like a mistake. One way to lower your interest rate and save yourself hundreds of dollars each year, is to refinance your vehicle loan.
There are a few reasons why this solution might be a good move for you:
Interest rates have dropped since you made your purchase.
If interest rates have drop just a couple points since purchasing your vehicle, you can save a considerable amount of money. Remember, even a percentage point or two can make a big difference over the cost of the life of the loan.
Your credit score has improved since you got your vehicle loan.
If so, congratulations! A better credit score always means a better rate. If your credit is now healthier than it was when you first got your vehicle loan, you may qualify for a lower interest rate.
You need to lower your monthly payment because your financial situation has changed.
By refinancing, you could extend the term of the loan so you can make smaller payments, but more of them.
You didn’t get your best rate when you purchased your vehicle.
Just because you had a high credit score and unblemished credit history doesn’t mean you got the best rate you could have received when you purchased your vehicle. Dealer-sourced vehicle loans usually carry a higher rate than the consumer deserves because the consumer simply wasn’t aware of a better rate or given time to shop around for a better loan. When this is discovered after the fact, it may be a good idea to refinance.
Your vehicle lease is expiring and you want to purchase the vehicle.
When you fulfill the terms of a lease, you typically have the option to buy the vehicle.
Unlike refinancing your mortgage or even consolidating your credit card balances, refinancing your vehicle loan is usually quick, easy and experience. No appraisal will be required. And usually there are minimal, if any, fees. But, you can usually roll those fees into your new loan.
If it sounds like refinancing your vehicle loan is the right move for you, review our vehicle loan options on our website. Soon, you can be back to driving the deal you deserve.
By Donovan B. Fox, Copyright 2016, SDFCU.org