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Should You Refinance Your Car?

Jul 25, 2016 3:37:35 PM


 

usalliance-should-you-refinance-carWhat is auto refinancing anyway?

When someone decides to refinance their car, they are essentially taking out another loan from a bank or lender to pay off their previous loan.

For example, let’s say you bought a car and the dealership sets you up with their finance department. After a year or so, you’ve come to realize that you could qualify for a better interest rate with a credit union or bank. So you request a loan with that institution to pay off the loan that you have with your car dealership, and now you only owe the institution what you borrowed.



When is it a good idea to refinance my car loan?

  • Interest rates have dropped. If interest rates have dropped more than a couple or points, then this might be a good time to refinance. Or, if your credit history has improved in the last year, you might qualify for a lower interest rate, thus seeing a possible decrease in your monthly payment.
  • You're seeking a shorter loan term. Earned a promotion? Got a new job? If your financial situation has greatly improved and you’re eager to pay off your loan sooner rather than later, you might benefit from refinancing. A shorter loan term could result in a lower interest rate as well — saving you money over time.
  • You wish to remove or add someone as a co-signer. Life happens. Maybe when you applied for your car loan, you needed a co-signer. Or you were recently married and wanted to add your spouse’s name to your loan. Whatever the case, these are all good reason to consider refinancing your auto loan.

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Now that you have the wheels you want, isn't it about time to pay them off at the price you want?

At USALLIANCE, we offer a two-minute pre-qualification process that won’t have a negative impact on your credit report - because we know your credit history is important to you.

Pre-Qualify Now

 

Topics: Borrow