There are millions of cars on the road throughout the country. And there’s a different type of auto loan to go along with practically every one. Just like the cars themselves, auto loans vary in structure, quality, and price of upkeep. In other words, not all auto loans are created equal. If you feel stuck with a “lemon” of a loan, here are 5 reasons to refinance your auto loan.
The first and most obvious reason to refinance an auto loan is to get a better interest rate. Whether through a special promotion or simply because interest rates have dropped since the time you purchased your vehicle, taking advantage of a lower interest rate can be a great way to save money. There are many factors that go into an interest rate, including loan term and credit rating. So, if you feel your current interest rate is too high, it doesn’t hurt too look into refinancing.
Paying less interest over the life of your loan can keep more money in your pocket. But shortening the term of a loan can mean big savings as well. Because costs associated with refinancing most auto loans aren’t usually prohibitive, even if your loan is fairly new, refinancing for a shorter period of time may still make sense. Of course, it’s still important to crunch the numbers to make sure you’ll be saving money, while taking into account how much you still owe and the current length of your loan.
If you’re leasing a car and the lease term is almost up, now is a great time to shop around for a new auto loan. Instead of automatically driving the car back to the dealership, opting to keep and refinance the car may make a lot of sense. Talk to your dealer about the lease payoff amount and then look for a loan that can save you money and help you build equity in your car.
As previously mentioned, interest rates can vary depending on a number of factors. And one of those factors is your credit score. If a poor credit score meant you signed a high-interest loan at the time of purchase, and you’ve worked to improve your score, a lender may consider giving you a better rate on a loan.
Right now, Utah First Credit Union is offering big deals on American wheels, with interest rates as low as 1.99%. If your car was made in America, you can refinance it at no cost through Utah First, as long as your existing loan is from an institution other than Utah First. And since America is the land of opportunity, this deal includes any vehicle with parts that are made or assembled in the U.S. Just check the VIN number on your vehicle. If it starts with a 1, 4, or 5, there’s a good chance your car qualifies.
If you’re stuck with a loan you’re unhappy with, right now is a great time to refinance your auto loan. Fill out a loan application today.
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