Reasons to Refinance Your Auto Loan

We get it. With interest rates and the price of gas going up, we’re all trying to find ways to save some money. If you currently have a ride you love, but an interest rate you don’t, here are a few reasons you should consider refinancing your auto loan:

Lower Monthly Payment

If you feel that your monthly payments are too high, you should look at different refinancing options that could help you lower that expense. Refinancing your auto loan simply means that you are paying off your current car loan with a new one. Depending on factors like your credit score and payment history, you may have different options when refinancing. The hope is that a refinance will bring you a lower interest rate, saving you money over the life of your loan. When refinancing, you also have the option to lengthen the term of your loan, which will extend how long you are paying on the loan but could save you money in the short run by lowering your monthly payment. Before making a decision, it is important to speak with an advisor to make the best decision for your specific situation.

Save on Interest

A lower rate on your auto loan could allow you to save money not only on your monthly payment, but also on the total amount of interest you will pay over the life of the loan. For example, an auto loan balance of $30,000 with a remaining term of 60 months and a 7% interest rate would mean a monthly payment of $594. If you were to refinance this loan to a lower rate, say 4%, you could lower that monthly payment to $552, while also saving $2,492 in interest over the remaining 60-month term¹. Try this handy auto loan refinance calculator to see how much you could save.