Why should you refinance your auto loan?

The Top 5 Reasons to Consider Before You Apply.

Should you refinance your auto loan? Whether you are refinancing your car, truck, motorcycle, boat, or RV, here are five key points to ponder when deciding if, and when, you should move forward:

1. Interest Rate Adjustments:

It’s in your best interest to pay attention to current interest rates. If you are hearing buzz about declining interest rates, you may want to check if your current auto loan could cost a lot less by refinancing.  For instance, saving an extra $100 per month may not sound like a lot, but over a year that’s $1,200.  At Stellar Auto Loans, on average, that equals a savings over the life of the loan of $4,000+:

2. Inexpensive Equity:

If you have paid off a large percentage of your loan, or own your vehicle out-right, there are options if you need additional funds.  Refinancing your current vehicle can give you cash-in-hand.  When you consider most credit card’s charge interest way above 10%, taking out a loan on owned collateral (your vehicle or home) can be a better economical decision in the long run.

3. Improved Financial Situation:

For a large percentage of Americans, a vehicle is a necessity for day-to-day life. If you had fair to bad credit when your vehicle was financed you likely paid a premium. Has your credit or income improved (or monthly expenses declined) since originally financing a car? It could be worth applying to see if your improved financial situation can help save you money – both in terms of monthly payments and interest paid over the life of your loan. Putting additional cash down or shortening your term can amplify savings even more.

4. Dealership Financing:

That initial excitement of driving off in your new car puts many buyers in a weaker state when negotiating terms.  Dealerships generally try to back into your ideal monthly payment with less than competitive terms. The buyer is happy with the monthly payment but didn’t notice the longer term, higher interest rate and/or other dealer add-ons. If you don’t have perfect credit and financed with a dealership, you are a prime candidate to refinance your loan.

5. Skip Payments:

Tight on cash? Whether that’s due to the holidays, tax season, school expenses (or for any other reason) most of our credit union lending partners allow you to skip up to 2 payments before your first loan payment is due.  If needed, that offers extra flexibility on your finances and another possible benefit to consider when choosing when and where to refinance your auto loan.

If you have questions about refinancing, or simply want to inquire about qualifying for additional monthly savings, call Stellar Auto Loans at 823-725-7334, email [email protected] or start by filling out our online application. There are no fees to apply.