Getting your finances in order can be stressful, but it doesn’t have to be. There are simple steps you can take to prevent or cure a financial letdown. One of the options you can take to get back on track, and stay there, is by refinancing your auto loan. Here’s how the process works.
Much like when you refinance a home mortgage, refinancing your auto loan pays off your existing vehicle loan. But it’s much faster and simpler to refinance the loan on your car or truck. During the process, your new lender pays off your old loan and the title to your vehicle is transferred to your new lender.
Refinancing your auto loan can lower your interest rate, decrease your monthly payment by changing your terms, or both. Most often, people refinance when interest rates are low to reduce the amount of interest they’re responsible to pay. You can also lower your monthly payments by extending the duration of your auto loan to break your payments up over a longer time frame.
You could potentially enjoy significant savings by refinancing your vehicle loan. Exactly how much you’ll save depends on the remaining balance of your current loan, the difference between your old and the new interest rates, and the terms of your new loan.
No matter what motivates you to do it, refinancing your vehicle loan is an option that’s well worth your time and effort. A little extra research now could blossom into huge savings over the remaining months or years of your auto loan.
