Are you looking to refinance your auto loan? Are you unsure if doing so will actually save you money? At MaxCash, we want our customers to know exactly how refinancing could help them.
MaxCash has created the following informational article to let you know if refinancing is right for you and what to expect if you do decide to refinance your auto loan.
When it Makes Sense to Refinance
Knowing when to refinance your auto loan is just as important as refinancing itself. There are a number of factors you should consider in order to determine if refinancing is right for you.
- Expensive Monthly Payments: If you are having trouble keeping up with bills each month, it might be worth refinancing your auto loan. Refinancing could result in a loan with a longer repayment plan but reduced monthly payments.
- Interest Rates Have Dropped: When you got your current loan, your credit score was different. If your score was lower, you probably got a less than stellar rate. However, interest rates are constantly in flux and it is possible that current rates for loans have dropped since then. Even a drop of 1 or 2 percent can result in drastic savings over the life of your loan.
- You Original Offer Wasn’t the Best: Even if interest rates haven’t dropped, it may be worth looking for a loan with better terms. Let’s say you received a loan with an interest rate of 8%, and other lenders were offering lower rates at the time. By refinancing your auto loan, you could receive better terms than what you currently have.
Refinancing may be a decent option, especially if you got your original loan from a car dealer, as they generally offer higher interest rates.
- You Have Better Finances: If you have improved your credit or have better income then when you first got your loan, refinancing may be a great option. By increasing your credit and lowering your debt-to-income, you might be eligible for more favorable terms when you refinance.
If interest rates are lower or your financial situation has improved, it may be worth looking into refinancing you’re current loan. Don’t wait too long though, or the benefits of a refinanced auto loan may not be worth it.
Has this article been helpful so far? If you have any other loan related questions, please check out our blog for more informational articles. MaxCash has decades of lending experience, and we have the knowledge to help you with any financial questions you may have.
Money You Might Save if You Refinance
Refinancing is different for each person, but with some calculations, we can discover how much refinancing can actually save you.
Let’s say a borrower has ideal credit and good financial history. This individual has a $20,000 loan with a 10% interest rate for 6 years. By doing some quick math, we can discover that this person is paying $375 a month. If this person were to refinance their auto loan, they could have their monthly payments drop to $324 a month, earning $50 in savings.
But if a borrower wanting to refinance their auto loan has low credit and a fluctuating financial history, their current loan terms may not be ideal. Let’s say this second individual has a loan out for $25,000 across 7 years with a 4.5% interest rate. We can do some quick math to find out that they are currently paying $348 a month over 84 months (7 years).
Refinancing that amount at 3% over the past 5 years of the loan would result in extra savings — about $13 per month! That’s over $700 dollars in savings!
Refinancing an auto loan could mean saving hundreds of dollars over the lifetime of the loan. Not to mention, a borrower could receive more pocket money every month.
MaxCash takes great pride in providing clients with superior customer service. Not only do we save customers time and effort, we also provide advantageous benefits for our clients that extend beyond just answering questions or helping customers get connected with loan companies.
But don’t just take our word for it, try our free services for yourself and see the difference we can make with the refinancing auto loan process. Don’t hesitate to contact us any day of the week, as we’re available from 5am to 10pm every day.
If you would like to reach out to MaxCash, please call toll-free at (833)-207-9052 or send an email to firstname.lastname@example.org.