It’s a great time to buy a new car, but it’s also a great time to refinance your vehicle. Refinancing can lead to a lower monthly payment, shorter payment term, or both! Here are some common changes that may mean it’s a great time to refinance your vehicle.
- Your credit rating improved
The biggest factor determining your auto loan status is your credit score. A credit report is an important part of the loan process and determines your interest rate, whether you’ll pay an insurance premium, and other fees your lender might charge.
If you didn’t have much credit history initially, chances are you had a much higher interest rate, as is common for new borrowers. But just a few months of solid payments can cut that rate down, as the months of steady repayment can help boost your credit score.
- You didn’t shop around initially
Many people feel railroaded throughout the car-buying process. They choose a car and then are told the price, the monthly payment, and everything else. Often, it may feel as though the lender for your car loan is predetermined. Take the time to shop around as you consider a refinance, and you may be able to find a lower interest rate or terms that better fit your situation.
- You need to change your monthly payment
If money is tight, consider refinancing for a longer term. Although you’ll pay more in interest, you’ll reduce your monthly payment and save the money you need now. You may also be able to reduce the monthly payment if your credit score has improved or interest rates have dropped.
If you can afford to pay more per month now, you can save money in the long term. Shorter-term loans usually have lower interest rates, and you’ll pay off the overall balance on your car faster.
Wasatch Peaks is here for you. To start saving and learn more about our loans, contact our specialists at 801-614-7959 or visit your local Wasatch Peaks branch.