It can be challenging to decide whether it’s the right time to refinance your auto loan. The basic process involves switching your current loan for a new one with better terms. However, there are factors beyond choosing the perfect lender. Knowing whether it’s the right time (or the wrong time) to refinance is also essential.
Refinancing can be a good idea if you can qualify for a better interest rate and you desire a more affordable monthly payment. However, not everyone will qualify for refinancing and sometimes prepayment penalties make refinancing less than ideal.
The Top Times to Refinance an Auto Loan
There are several situations where refinancing your auto loan could be a good idea. Take a look at each of them to see whether it might be the right choice for you right now.
When You Need Lower Payments
If you are making less money or need extra funds to meet your financial goals, refinancing your auto loan could result in a less expensive monthly payment. When refinancing, you may get a lower interest rate or increase the length of your loan. The former is ideal since you save money and pay less overall.
When Your Credit Score Increases
The best credit score for an auto loan will typically be 670 or higher. If you had a less-than-perfect credit score but it has improved, you may qualify for a loan that has better terms. While there is no guarantee, lenders tend to be more lenient on terms if you have excellent credit. It’s worth checking out your options.
When Your Car Has Positive Equity
When you have a car with positive equity – where it’s worth more than what you owe – this can result in great terms with refinancing. Why? Because if you stopped payments, the lender would seize the vehicle and sell it for more than you owe. This may result in getting a lower interest rate.
Choose Finley Fi Solutions for Your Auto Loan Refinancing Needs
If refinancing is a good idea for you right now, it’s important to work with a company that gives you options. Finley Fi Solutions prioritizes our customers and gives them the best refinancing terms possible. When you’re ready to see what options are available, visit our website. You can find out your options in just a few clicks.