When is a good time to refinance a car loan? What conditions make it a good idea to change up an auto loan? That’s the topic of today’s post and something our Burford auto loans team will explain.
Auto loan refinancing in Burford
Auto loan refinancing is a term for replacing your old loan with a new one. Technically, you can do it at any time but only some of those times make sense.
Refinance at the wrong time and it could cost you money and not provide the advantages you were looking for. Refinance at the right time and you could improve your situation in any number of ways.
Typically, we wouldn’t recommend refinancing until you’re a couple of years into the loan to prevent extra expense, but if you need to refinance, you can do it whenever you like.
The following are good times to refinance a car loan:
When interest rates drop
It’s usually a good time to refinance a car loan if there is a big drop in interest rates. We don’t get big dips in rates any more as they seem to be more gradual, but if it happens, it’s a good time to refinance.
When you graduate from poor or bad credit to good credit
If your current loan is a bad credit auto loan and you have improved your credit score so you’re now in ‘good’ territory, that can be a good time to a refinance car loan.
As long as your current loan doesn’t have early settlement fees or anything else that cost you money, switching to a standard auto loan should work out much cheaper.
To consolidate other debt
If you have other debt and spare equity in your car, you could roll all your debts up into a larger Burford auto loan. That way you’re paying just one debt a month at a lower rate than many other types of debt.
If you need to lower your payments
If you need to lower your monthly payments for any reason, that can also be a good time to refinance. Whether your income has dropped, your outgoings increased, or you’re trying to save for something, borrowing less or over a longer period should get you what you need.
If you want to shorten the loan term
If you’re finding the loan easy to pay, you can refinance to a shorter term with higher payments. This means paying the loan off earlier but also means paying less interest.
Need to remove a co-signer
Another common reason for auto loan refinancing in Burford is to remove a co-signer. That could be because of a breakdown in relations, because you no longer need one and you want to free them of the burden or something else entirely. Going it alone is an excellent reason to refinance!
Auto loan refinancing is a common way to change things up and something our Burford auto loans team can help you with.
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!