You’ve had your car for a few years: After college it went with you on a cross country adventure and it helped you eventually come home; it got you to and from your first real job.
A lot has changed since you got your car… except your payments. And while you would never EVER get a new one, you’re thinking that it may be time to adjust how you’re paying for it; maybe it’s time to refinance your auto loan.
When you refinance your loan, you’re essentially taking out a new auto loan with new terms–from a new lender–to pay off your existing one.
Why refinance your auto loan?
Here are the main reasons you may want to refinance your auto loan:
- You didn’t snag the lowest interest rate the first time around, and you think you’re paying too much for your auto loan. See current loan rates.
- Your credit has improved, and you know you can secure a lower interest rate than you did previously.
- You need to lower your monthly payments because your expenses have increased.
- Interest rates, nationally, are dropping.
- You want to remove–or add–someone to your auto loan.
And here are some things to ponder if you’re considering refinancing:
- Achieving lower monthly payments on your auto loan by earning a lower interest rate is always a good thing: A lower rate means less interest, which means you’re paying more off more principal each month. However, if you’re looking to make lower payments by extending the term of your loan, you may end up paying a greater total sum in the long run, due to added interest.
- You can also shorten the length of your auto loan, thus reducing the amount of interest you’ll pay.
- Be sure to know your current interest rate.
- If your car is worth less than the loan balance, it may be difficult to get a lower interest rate.
- Don’t forget to make your loan payments while you’re in the middle of refinancing.
It doesn’t hurt to ask
At Dane County Credit Union, we know how important your car is to you. If your vehicle is financed somewhere else, it’s never too late to come into one of our Madison-area branches and refinance your auto loan with us. We may be able to help you get a better interest rate, lower your monthly payment or both!
Go ahead and contact us to ask what solution we recommend for you. We’ll run the numbers and see if we have a better deal that what your currently have. If not, we’ll congratulate you on the great deal you scored!