Publish Date - October 17, 2019
Author: Dale Peterson
Car Loan Refinancing: When Is The Right Time
Unless you live in the proverbial cave when it comes to personal finance news, you have probably heard about the benefits of a home mortgage refinance. What many people do not realize is that all the benefits associated with refinancing your mortgage also apply to car loan refinancing. Many people complain about the current state of their loan. Whether you are unhappy with your interest rate or simply dissatisfied with the customer service or business policies of your current lender, you should realize you are rarely stuck in a financial situation with no hope of change.
Make a Change for Better Service
If you went to a restaurant and the wait staff was extremely rude or the food was served cold, you probably would not return the next night. Even if you were willing to give the place a second chance, if the problems were repeated, you would take your appetite and money elsewhere. It may be possible to do the same with your vehicle financing. Although stellar credit will make car loan refinancing easier, you may be able to find another lender even if your credit is only fair. Begin by looking online for reputable lenders who are willing to refinance vehicle loans.
Make a Change to Save Money
Sometimes, individuals purchase a vehicle at a higher than desired interest rate due to poor credit history. Some people go ahead with the interest rate because they need the car for work or other purposes and cannot afford to be without a vehicle. If you were in such a situation, but have corrected your finances over time, you may be able to command a better interest rate. Instead of sticking with the current loan structure, check out options for refinancing. Something as small as half a percentage point in interest could save hundreds or thousands of dollars over the life of the loan. When dealing with a high interest financial arrangement, the sooner you make a change for the better, the more you save.
Make a Change to Optimize Your Budget
If you are on a tight budget or financial plan, the day your car payment is due each month can make a huge different. For example, if the car payment and mortgage are due in the same week, it might be hard to stretch your paycheck during that time. Some banks will work with you to change the due date for your loan, but others are not willing to do so. If you need a change in payment date or loan structure, you might consider car loan refinancing as a way to optimize your budget. You should only make such a move if you can secure a loan that will not cost more in fees or interest, however.
Car loan refinancing is a great way to correct past financial mistakes or get ahead with current debt. When done properly, refinancing can save money or provide a way to pay off bills faster. You should only refinance your automobile loan through reputable banks or online lenders and should never use credit cards to refinance your vehicle loans.