When you hear the term “refinance”, the first thing that comes to mind is probably a mortgage. While this is the most common occurrence, you may be delighted to know that you can also refinance your auto loan. It’s not really an advertised thing. More often than not an owner seeks out refinancing options due to a referral from someone else who did it recently.
Why should you refinance your auto loan?
By refinancing your auto loan, you can potentially cut your rate in half! There are three main reasons people have high interest rates on their auto loans: they didn’t shop around, they had bad credit or they just agreed without really considering what they were agreeing to. If any of these were you, have no fear; a lower rate can still be in your future.
How can you get a better rate on your auto loan?
First, shop around. Know your options and all the facts. Here’s a little tip: focus on the interest rate not the monthly payment. This way you’re not paying more than you need to. Next, work on that credit. In order to be considered for refinancing you will need to be up to date on your loan payments. It wouldn’t hurt to also be current on any other loans such as your mortgage. Being up to date shows that you’re responsible & positively affects your credit.
It all comes down to being intentional. With some research, thought and planning, you could do wonders for yourself all around.
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