Refinancing Your Auto Loan
When, Why, and How
Is an auto refinance right for you? Refinancing your vehicle loan can save you up to 20% on your monthly payments, but when is the best time to refinance? Here are our four best reasons why and why to refinance your vehicle loan...
1. Drop in Interest Rates
A drop in the interest rates is the first sign that you could save money. Refinancing to a lower interest rate can reduce your monthly payment. Do you know your rate? Right now, BMI Federal Credit Union auto rates are as low as 5.540% APR1, so it's possible your current rate is higher. Apply today with low rates and no application fees.
2. A Positive Change to Your Credit Score
Low rates aren't the only great reason to refinance. Your credit score is an important determining factor for your loan rate. If you notice an increase in your score, you may qualify for a lower loan rate, even if overall interest rates have not dropped. It's a good idea to check your credit score a few times a year. If your number is going up, then it’s a good time to look into refinancing your loans.
3. Financial Troubles
The past year has been a challenge to many people. If you are among those who've found themselves in a tight financial situation, it may also be a good time to look into refinancing your auto loans to lower your payments. If you're unsure if this will be the right choice for you, BMI Federal Credit Union has no application fees, which means you can take a peek at what your payments could look like, whether you choose to refinance or not.
4. A Change in Personal Status
In addition to saving money, you may have the option to change the status of owning your loan. In other words, you can refinance to remove any original co-signers from your loan, and have the entire loan in your name.
Is Refinancing Always a Good Idea?
If you experience any of the above changes, refinancing is a great financial move, but like with any financial choice, there are a few other considerations. Review your current loan documents and look for a pre-payment penalty or an early termination fee - that is, a fee imposed if you break up with your current financier. We don't think this is a refinancing deal-breaker, but it's an important step in the decision-making process. You also want to consider changes to your loan term if you refinance. Take the time to consider your new loan carefully.
How Can We Help?
Get auto rates as low as 5.540% APR1. If you still aren't sure if auto loan refinancing is right for you, give us a call at 614.707.4000 or stop by any one of our branches in branch in Dublin, Westerville, or Columbus.