If you’re a car owner, you’ve probably heard of refinancing an auto loan. But what does it really mean? Here’s all you need to know about the benefits of refinancing an auto loan.
What is an auto loan refinance?
Refinancing an auto loan is the process of taking out a new auto loan to pay off the remaining balance on an auto existing loan.
Benefits of refinancing an auto loan
In most cases, people refinance to get a better interest rate or lower their monthly car payment. Here are some of the most common benefits of refinancing an auto loan.
Lower interest rate—Getting a lower interest rate means you’ll end up paying less interest during the entire term of the loan.
Lower monthly payment—If you’re able to get a lower interest rate, that can lower your car payment leaving you more cash in your pocket each month.
Longer term—If you’re currently in a situation where money is tight, you can refinance your auto loan to a longer term. This will lower your monthly payment and give your budget the relief it needs until your cashflow improves.
Shorter term—If your finances have improved, you can refinance to a shorter term. You’ll be paying more money each month, but you’ll be able to pay off the loan sooner, which also means you’ll be paying less interest.
Calculating an auto loan payment
To see if refinancing an auto loan is right for you, use one of our free online auto calculators to calculate a vehicle payment or compare monthly payments by term. It will help you determine how much you could save with an auto loan refinance.
If you’re looking to refinance your auto loan, now is the perfect time! Make no auto loan payments for 90 days when you refinance your auto loan from another lender. You can apply online or via our Mobile Loan Application.