Buying a new car is one of life's most exciting purchases. Yet it's often what you do after you make the initial purchase that has the most influence on your financial success.
One such example is the possibility of refinancing your auto loan. Under the right circumstances, such a move offers considerable benefits. By revisiting your initial loan, you can potentially lower your interest rate and your expenses. Refinancing a vehicle is also fairly easy, a much simpler and faster process than refinancing a mortgage.
To help you determine if a refinance is right for you, let's take a look at five reasons why it makes sense to revisit your current auto loan.
Are you paying too much?
One of the first things to look at when considering an auto refinance is your current interest rate. There's a good chance that you're simply paying more than necessary. If your rate is in the six to seven-percent range -- and you have good credit -- you may have good reason to explore a refinance.
Has your credit score improved?
Your credit score has a major influence on the interest rate you'll be offered. So if your credit has improved significantly since the time of your initial car loan, you may wish to explore a refinance.
Have interest rates dropped?
If you purchased a vehicle three years ago -- and interest rates have dropped in the meantime -- that's an excellent reason for exploring refinancing. A lower interest rate environment means that you'll likely get a better rate this time around.
Did you get the best rate your first time out?
Even the most financially savvy person can have an off day. Perhaps circumstances dictated that you had to buy a car quickly, and you didn't have time to shop around for the best rate. Whatever the reason, if you didn't get the most competitive rate when you bought the car, that's a great reason to refinance.
Do you need to free up money?
By refinancing a car you can secure a lower interest rate and reduce your monthly payments, sometimes significantly. If you need to free up cash for other expenses, that's a great reason to pursue a refinance.
If any of the five reasons listed above resonate with you, KeyPoint Credit Union is here to help. Please visit our website to learn more about how we can assist you.