Whether you’re content with your vehicle loan or not, there may come a time when refinancing is the right way to go. This can be beneficial for a variety of reasons, but there are some surefire signs that it’s a viable option for you.
Here are four signs refinancing your auto loan might be a good plan.
You have more fund availability
Your repayment plans when purchasing a vehicle might not always match up with the loan you’ve taken on. If an influx of funds occurs from a new job, a raise or another loan being paid off, you may want to ramp up your repayment on your vehicle. So if a six-year loan would be better served as a four-year loan, it might be a sign it’s time to refinance for better terms.
Your credit score improved
Want to know one of the benefits of an improved credit score? More buying power when it comes to borrowing! If you’ve experienced a marked improvement in your credit score since you first took out your vehicle loan, refinancing may help you take advantage of a lower interest rate or removal of a cosigner that might’ve been previously required.
Your monthly payment is high
Not every year is built the same when it comes to your finances. If you’re feeling the strain of your designated monthly payment on your auto loan, it might be time to refinance to adjust that minimum payment to something more manageable for your budget. Just remember that a lower monthly payment often means longer terms and more interest paid for the life of the loan.
Interest rates have changed
Though the auto lending market is a fairly consistent one, interest rates are bound to ebb and flow now and again. So if you’ve noticed lenders in your area have lowered their interest rates on vehicle loans since you first borrowed, refinancing can help you take advantage of lower rates on your own loan.