When Should I Refinance My Auto Loan?

March 1, 2019

Refinancing an auto loan is not a bad idea, as it can provide borrowers with a lot of benefits. But knowing when to refinance can be just as important as applying. There are many reasons why someone would want to refinance an auto loan, and MaxCash wants borrowers to know when it may be a good time to start the process.

Getting Lower Interest Rates is a Great Reason to Refinance

If you financed your vehicle and feel that you could have gotten a better interest rate, then refinancing could be a good move. You can attempt to get a better loan any time you want—even before your first loan payment!

Refinancing an auto loan so quickly can be problematic though, as doing so will generate a hard inquiry on your credit report—leading to a lowered credit score. It might be wise to spend some time researching lenders before refinancing so your credit score has time to bounce back.

It’s also worth considering the amount you owe compared to the value of your vehicle. Banks and finance companies are less inclined to refinance an auto loan if the vehicle isn’t worth at least as much as the loan.

However, if you did find a financial institution willing to help you refinance, then they are doing so at considerable risk. Because these companies are taking such a risk, your interest rates could be affected.

Improved Credit Score Can Be a Reason to Refinance

All those months of paying your loan back on time can have a positive effect on your credit score.  Lenders see a good credit score as a sign of a reliable borrower, which can lead to receiving better interest rates.

If your credit score has improved since you first took out your auto loan, then refinancing might be able to save you money. For example, refinancing a $15,000 car loan with a 7% rate to a 5% rate could save you around $800 in interest.

An Improved Financial Situation is Another Reason to Refinance

If you have improved your credit or have better income then when you first got your loan, refinancing is a great option for you.  By increasing your credit and lowering your debt-to-income ratio, you might be eligible for more favorable terms when you refinance.

If you want to know more about refinancing a loan, or just want more knowledge on the different types of loans available, then please check out our blog. We provide financial information and resources on several topics and queries.

Refinancing Can Be Great if You Want to Change Your Loan Term

Another great time to refinance is when you feel your payments are too high. If you need a lower monthly payment, extending the loan term is a great way to do just that. By simply extending an auto loan from 48 months to 60 months, you could save hundreds in interest payments.

This also works is reverse, too. By reducing the term of your loan, you’ll increase your monthly payments while simultaneously reducing the amount of interest you pay overall.

At MaxCash, we want to help you get the best deal on your refinanced auto loan. Though, we don’t lend money directly, we work with a large network of reputable lenders across the country. We may be able to help you find a compatible lender in no time!

If you wish to contact one of our representatives, feel free to call any day of the week—even Saturday and Sunday! Call toll-free at (833) 207-9052 or send an email to info@MaxCash.com.

The MaxCash website does not offer or provide loans, but rather, it offers a service. It should not be construed as a lending agent or broker. The site does not endorse any lenders and does not charge visitors any fees. The website owners do not evaluate potential lenders’ applications, nor do they approve or deny credit. The MaxCash website does gather applicants’ personal information and transmits it to lenders that are part of the site’s lending network. No one is required to make use of this website, nor are they under any obligation to begin contact with site operators or to attempt to secure a loan with any of the site’s lending partners. Transmission of your financial and personal information on the website in no way obligates lenders to offer you a loan or any other kind of credit product. Be aware that cash transfer times can vary, depending on the lender and the bank you use. It may be necessary to fax information under certain circumstances. All questions about loans, and any concerns you may have should be directed to your lender. These loans are intended as short-term financial solution to satisfy borrowers’ needs for immediate monetary relief. This is not intended to be part of a long-term financial plan for individuals. These services are not offered in all states. Potential borrows may undergo credit check if lenders choose to use any of the major credit reporting bureaus, including Equifax, Trans Union and Experian. They may also use other alternative sources to check credit ratings. Your request for a loan constitutes your agreement and acknowledgement that (A) your personal data may be shared with lenders and perhaps other third-party partners, and (B) lenders can acquire credit bureau reports that detail your credit history. Reports from major credit bureaus, such as Equifax, Experian and TransUnion may be obtained and used to evaluate your reliability as a borrower.

1Loan amounts by the lenders vary based on qualifications.

2Since we do not lend money directly we cannot offer you a solicitation for a loan. In all serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans are not available in all states and all areas.

3Loans such as, Auto Title Loan companies typically do not have pre-payment penalties, but we cannot guarantee that every lender meets this standard. Small Business Loans typically do have pre-payment penalties and occasionally will use your car as collateral to secure the loan. Other types of loans may have pre-payment penalties as well.

4All lenders are responsible for their own interest rates and payment terms. Max Cash has no control over these rates or payments. Use of the work competitive or reasonable does not mean affordable and borrowers should use their own discretion when working directly with the lender.

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Loans such as Car Title Loans are expensive and you may have other ways to get funding that is less expensive. These types of loans are meant to provide you with short term financing to solve immediate cash needs and should not be considered a long-term solution. Residents of some states may not be eligible for a loan. Rejections for loans are not disclosed to our firm and you may want to contact the lender directly.

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