Want to save money?Things may have changed since you bought your car, which means you might be in a better position to lower your car payment or your annual percentage rate (APR) - or both, by refinancing your automotive loan.If you think you may now qualify for improved loan terms, refinancing can translate into immediate savings, make your payments more affordable, and free up your monthly budget.
When to refinance an auto loan
Your credit score is the most important factor in determining the rates available for a loan. If you have been making on-time repayments towards your current loan for the past 6 months or more, your credit score has likely improved. With an improved credit score, you may qualify for improved rates which translates into lower monthly payments and less finance cost over the life of your loan.
If you find your payments are too high and are struggling to keep up with your repayment plan you may want to extend your term in order to lower your payments and make it easier to keep up. Refinancing your loan can lower your repayments by extending your loan term and/or by lowering your interest rate.
If you purchased your vehicle when interest rates were higher than the current market or if you did not qualify for a lower interest rate at the time, refinancing can save you significant amounts of interest paid over the full life of your loan.
If you had credit card debt or other loans when you first purchased your vehicle that has since been paid off, not only do you have proof that you are in control of your finances, your debt-to-income ratio will appear more favourable. The less risky you look to a lender, the more likely you will qualify for lower interest rates.
The higher your income is, the less likely lenders are to consider you a risk. If your income has substantially increased it may be worth considering refinancing your loan to secure a lower rate, a shorter term, or both. If you can afford higher payments with a shorter term, you could potentially save thousands in interest in the long run.
While having a co-signer can be a great way to secure an automotive loan, circumstances change over time, your credit score improves or you may simply wish to release a co-signer from their obligation for various reasons. If your credit is high enough to qualify on your own, choosing to refinance allows you to do so.
If your car is worth more than your loan balance you may choose to refinance an automotive loan for a larger amount than what you owe in order to tap into the equity of your car and put a bit of cash into your pocket.
Refinance your loan with Jim Gauthier Chevrolet
Refinancing doesn't have to be a complicated process and we are here to help.If a loan refinance is something you are interested in, even if you bought your vehicle somewhere else, we can help you explore your options and assess if refinancing may be a rewarding opportunity for you.