If you have an existing auto loan, you could refinance it so that the amount of interest you pay is less on interest and reduce your monthly payment by changing the loan terms or reducing the interest rate. Of course, to get this, you need to have a good credit score, which is done by making timely installment payments.
Most used car dealerships offering you a loan won’t give you a favorable contract, meaning you’re likely to overpay for your vehicle. This is why you need to be comparing auto loan rates – to ensure that you don’t pay too much for your vehicle.
Many online loan company’s websites offer you a free look at your credit score, but these are only ideas of what your credit score is like. They may not give you the actual score that is used to determine your creditworthiness.
Why should you consider refinancing your auto loan?
- Using a personal loan to refinance your auto loan can reduce the interest rate. Many dealers offer higher-rate loans, but refinancing the loan with a personal loan can reduce the rate you get.
- You can get a shorter loan term, which helps to lower your interest rate and the total interest amount you pay.
- An unsecured auto loan that’s refinanced comes with a fixed rate and set payment schedule. Extra payments can be applied to the principal, lowering the entire interest amount paid.
Before you apply for a refinancing loan, consider using loan calculators to determine how much you’d save and if the terms would be rather going through.
