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When is the best time to refinance your auto loan (revised)?

Alysha Klein
By Alysha Klein - May 14, 2022

Unhappy with your monthly auto payment?

You thought you had a great rate, but your monthly payment shows otherwise. If you feel that your auto loan interest rate isn’t ideal, perhaps it’s time you looked into refinancing your car.

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Just as you can refinance a mortgage or consolidate credit card debt, you're able to refinance your auto loan and the terms too. By refinancing, you could be saving hundreds of dollars each year and sometimes close to a thousand dollars over the life of the loan. We have put together this guide to help you along. 

TFCU Auto Refi checklist

So, when is the best time to refinance your car?

Here are four instances when you should highly consider refinancing your auto loan.

1.   Auto loan interest rates have dropped.

If interest rates have dropped even a couple of points since you made your vehicle purchase, it might be a great time to research options to lower your payment. When looking at the various types of auto loan options, keep in mind that if you purchased a brand new car and are refinancing it, that car is now considered a used car. Be sure that you are looking at the correct interest rates when comparing lenders.

2.    Your credit score has improved.

Anytime your credit score improves it presents an opportunity to re-evaluate the current loans you have. You might be able to save money. If you had some issues when getting your initial auto loan, issues that prevented you from getting a better interest rate, now might be an excellent time to go back and see how you can lower that rate. Or maybe just paying your auto loan on-time has raised your credit score substantially and you feel that it’s time to reward yourself with a lower monthly payment. 

3.    You didn’t get the best auto loan rate.

Did you got caught up in words, “0% financing” when purchasing your vehicle? You thought it was your lucky day! You couldn’t wait to sign the papers and forgot to read the fine print. That "0% financing" was for six months only. Now you’re hit with an interest rate you didn’t see coming. That means it’s time to refinance! It’s easy to get caught up at the dealership with all the excitement of buying a new vehicle that sometimes we overlook that fine print.

4.    You want to reduce your monthly bills.

Life can change in an instant. Maybe it's time to see how you could save money by reducing your monthly bills. Refinancing your auto loan is a great way to help give you some extra cash. You can choose a 72-month auto loan instead of the 36-month auto loan, which could save you money on monthly payments and give you some extra cash each month. 

Refinancing an auto loan can be done at any point in the life of the loan. Stop throwing away money, stop stressing over your current monthly payments and start talking to a Tropical Financial representative about the options available to you. Ready to get started? Apply to refinance your auto loan in 10 minutes or less. 

APPLY FOR YOUR AUTO LOAN  IN 10 MINUTES OR LESS

 

 

 

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The content reflects the view of the author of the article and does not necessarily reflect the views of Tropical Financial Credit Union or its employees.
We do not guarantee the accuracy or completeness of the information presented in the article.