It can be expensive to own a car. Monthly payments can be pricy, even if you choose to purchase a used car. Refinancing your auto loan is an option to cut down on the amount you pay every month. It’s often done when your monthly payments are too high or your financial situation has changed since your original loan was created.
However, there are always risks, and sometimes refinancing ends up being more expensive. Understanding the benefits of refinancing lets you assess your situation to decide if moving forward is right for you.
1. Decreased Interest Rates
The interest rate has a huge impact on the amount of your monthly loan payment. It is based on your credit score (and other things). If you have a better credit score than when you took out your loan, you may be eligible for a lower interest rate, which means every payment is less expensive.
2. Lower Monthly Payments
If you’re having trouble meeting your monthly payments, refinancing can free up cash and reduce your payment amounts. This can be done with a longer-term or a lower rate. Some people will be eligible for both. Keep in mind that a longer term means saving money each month but paying additional interest in the long term.
3. Quicker Loan Completion
When you refinance, you can often pay the loan off quickly. If you make more money now than when you financed the car, refinancing can be a good way to pay off the vehicle faster.
When you pay it down more quickly, you spend less on interest in most cases. Make sure to look into the prepayment penalty to be sure it’s right for your situation.
4. Access Cash Quickly
Finally, some refinancing options offer cash back so you can access money when you need it. It’s similar to traditional refinancing but you also get a lump sum based on the equity of your car. You may get lower monthly payments or better loan terms at the same time or you may not.
Access Better Auto Loan Terms with Finley Fi Solutions
When you work with Finley Fi Solutions to refinance your auto loan, you can access a wide variety of benefits. You could lower your interest rate, change the term length, get cash back, or skip monthly auto payments. We can help you extend your vehicle warranty or convert a lease into a loan. Reach out to us today to get started with auto refinancing.