Auto Refinancing Makes Saving Money a Breeze

Refinancing your auto loan could save you hundreds, or even thousands of dollars!

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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+:

Average Refinance Savings


Average loan pay-off before refinance



Average loan pay-off after refinance


Enjoy $4,456 in savings!

Monthly payment will be lowered by almost $100/month!

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.

How to Refinance Your Auto Loan

In today’s world, refinancing your car, truck or motorcycle is relatively easy and can be done online in most cases. The following steps will simplify the process for you when you consider refinancing:

Step One: Consider Your Current Situation

Examine your most recent auto loan statement.  You will need to note your current interest rate, term length, remaining principle/balance, any additional monthly fees as well as pre-payment penalties.  If interest rates are lower today than when you took out the loan, if your credit score has increased, or your monthly expenses have decreased, refinancing may be a great option for you.

Most lenders will look at your loan-to-value ratio (this is what you owe on the car compared to what it is worth) so if you are “upside down” by less than 20% you most likely can refinance.  At SALrefi, we generally accept applications up to 120% loan-to-value, but some exceptions do occur.

Lenders will also consider credit score, monthly income versus expenses, whether previous vehicles have been repossessed, as well as bankruptcies.  If you’ve experienced a bankruptcy over 2 years ago, you may still qualify to refinance with us.  Our lenders want to see that you have been making payments on your current loan.  We are willing to look at each refinance on an individual level.

Step Two: What is Your Goal?

Are you looking for the lowest monthly payment?  Do you want to decrease the length of your loan?  Are you unsure if you got the best financing option at the dealership?  Understanding your goal when refinancing will help the lender recommend the best terms to achieve those results.  A SALrefi loan specialist can advise you on what your best option is considering your goals, current loan, and financial situation.    

Step Three: Prequalify to See Possible Savings

If you are worried about having your credit pulled, get prequalified before you officially apply for a new loan.  This process will provide a close estimate on savings and likely terms to help you determine if refinancing is a good option for you.

Here is a checklist of information you will need to prequalify and/or apply for a refinance:

  • Current loan details
  • Vehicle information: Make, model, year, mileage, and vehicle identification number (VIN)
  • Current monthly income and expenses
  • Current job or retirement information
  • An estimate of your credit score
  • Driver’s license and state where issued

Step Four: Apply and Finalize Terms

Once you have officially applied, be it online or via telephone, sit back and relax. SALrefi will do the legwork to find you the best lending source from our credit union funding partners. Your lending specialist will pull your credit to finalize all terms and details of a new loan. You are not obligated to move forward unless the terms of the loan meet with your approval.

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.

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Call 833-725-7334 (SAL-REFI)

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A few minutes could save you over $1,200 a year.