Can you refinance a car loan in Mount Hope? Can you change the amount or length of the loan? When is a good time to refinance? These questions and more will be answered in this post!
Our auto loans team outlines your options if you need or want to refinance a car loan in Mount Hope.
Can you refinance an auto loan?
You can refinance an auto loan as long as your current situation will support it.
That means having sufficient credit score for the new loan, having sufficient income, not having too much debt and passing the affordability check.
If your circumstances haven’t changed since the original loan and you’re not borrowing more, you should have no problem refinancing.
Can you change the amount or length of the loan?
You cannot normally change the terms of an existing loan but you can change them when you’re refinancing.
This is a popular reason for refinancing. To either extend the term to lower the monthly payment, borrow a little more to pay off other debt, to shorten the term to reduce the interest paid and a few more reasons.
When is a good time to refinance an car loan in Mount Hope?
Technically, you can refinance at any time but there are specific times when it makes most sense.
If interest rates have significantly reduced – If you got your loan when rates were high but they are now lower, that’s a good time to refinance your auto loan. The rate drop needs to be enough to justify the change though.
You increased your credit score out of bad credit – If your original loan was a bad credit auto loan and you have improved things since, that’s a good time to refinance. You could save significantly if you can get into ‘good’ credit territory.
You need to raise money – If you have paid off a portion of your loan and have equity in your car, you can borrow against it to consolidate other, more expensive debts.
You need to free up money each month – If you’re finding the loan difficult to manage, refinancing to a lower amount or over a longer term will lower the monthly payments.
You want to pay off the loan earlier – While you can overpay your existing loan, if you consistently have money left over each month, you could refinance the loan for a shorter term so it’s paid off faster.
Should you refinance A Car Loan In Mount Hope?
If you’re in one of the situations above, refinancing is definitely an option. It isn’t a universal fix-all situation but it can work. As long as it will benefit you in some way and the savings or convenience factor makes the process worthwhile, it can be a good idea.
It isn’t suitable for everyone though so think carefully before you jump into it.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!