Are your monthly car payments a bit higher than you’d like them to be due to the interest rate? The car loan you were approved for and the interest rate you were given initially may have been due to poor credit or other financial issues preventing you from getting a better rate. If your situation has changed, you may be eligible for a better interest rate—and lower car payments—by refinancing your auto loan.
Unlike mortgage refinancing, which can sometimes be complex and have strict requirements, auto refinancing is often a simple process. If you’re thinking about refinancing your car loan, here’s some important information:
Good candidates for auto loan refinancing
In a nutshell, consumers refinance their car loans in order to get a better interest rate. Aside from poor credit, your initial auto loan may have a high interest rate due to a number of factors, such as unemployment or lack of credit history. However, if your situation has changed since obtaining your auto loan, you may be a good candidate for refinancing. If your situation hasn’t changed, but you have been timely with your car payments and enough time has passed, you may still qualify for a better rate through an auto loan refinance.
When and where to refinance
After taking out your initial car loan, when is it a good time to refinance? There is not one single answer to this, as financial professionals tend to have mixed opinions. As a general rule of thumb, however, shoot for anywhere between six and 18 months.
As to where you should refinance: you’ll often have the best luck with your current lender, but that doesn’t mean you shouldn’t shop around. Check rates with credit unions, too, and don’t make any final decisions until you’ve compared all of your options.
The amount you can save depends on various factors, including your original interest rate, new rate, and amount you owe—but most people can save hundreds to thousands of dollars after they refinance their car loan. Depending on your lender’s terms and conditions, you may incur some fees by refinancing your loan, but they don’t usually exceed a few hundred dollars.
Do you need extra cash to take care of mounting bills and other monthly expenses? Peachtree Financial Solutions may be able to get you a lump sum of cash if you’re receiving long-term payments through an annuity or structured settlement. As a payment stream recipient, you may have the option of selling some or all of your future payments and receiving your money upfront. Having access to some of your cash sooner, and in a larger lump sum, can make it easier to catch up on bills and pay off debt. Contact Peachtree Financial Solutions today for more information and to get started!
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.