The short answer? Probably yes. The long answer? See below. For most customers who receive an initial auto loan, the interest rates can be higher than desired. However, with a good enough track record and credit score, you can refinance your car in a fairly simple manner to reduce your monthly payments, your months left on the loan, and your interest rate. Seem too good to be true? We think so too.
Reasons why you should refinance your car:
- You are eligible for a lower interest rate. Over the course of an auto loan, even a 1-2 percentage decrease in interest rate can make a huge difference. Luckily, most loans with an interest rate over 6 percent are eligible for refinancing.
- You’ve improved your credit score. If you’ve hit the ground running since you first got your car loan and you’ve seen an improvement in your credit score (even a small amount!) you might be able to see some serious benefits from refinancing your car.
- You didn’t get a good deal when you got your loan through the dealership. If you were in a pinch when you first drove your car off the lot and ended up taking a not-so-great deal from the salesman at the lot, a refinance may be a wonderful option for you.
- You want a lower monthly payment. Even if you are ineligible for the other benefits of a loan refinance, you can still lower your monthly payments by extending your lease. For situations where you need a breather right now, this can really help. And, if you do qualify for the other benefits as well, you can lower your monthly payments in addition to decreasing the interest rate. What a steal.
- You leased the car and you want to purchase it at the end. If you are nearing the end of a lease and you decide that you want to keep the car for good, you can negotiate a car loan that will help you pay off the car in a reasonable amount of time.
The only caveat:
If you owe more on the car than it’s worth, refinancing may not be the best option until you pay enough off to shift the loan from being upside down. However, that being said, it’s not impossible. We still recommend checking with an expert to see how you can refinance your car even when you owe more than it’s worth.
Preparing to refinance your car loan:
When getting ready to submit a refinancing loan, be prepared for a representative to ask several things of you, including current rent payments or mortgage, previous residence history, employment, vehicle mileage, remaining loan balance, and other stats about the car. To make the process streamlined, have this information ready to go.
How to refinance your car:
Through Blue Sky Auto Finance, of course! We offer reasonable and cost-effective solutions for refinancing auto loans. We work with you to get the best interest rate, monthly payments, and loan convenience. Find out more today and begin saving money on your car loan.