Do you have a car loan? If you do and want to save money, you should think about refinancing your car loan ASAP. There has never been a better time (no, there has never been a more advantageous time) to refinance a car loan.
Our Mount Hope car loan team outlines why now is an opportune time to refinance a car loan before rates increase.
Understanding the market forces at play
The used and new car industry is experiencing a massive shortage of cars. Carmakers are not able to produce enough new cars due to a shortage of computer chips that the vehicles need to function properly.
This problem is compounded by a shortage of used cars, with the limited number of new and used cars that are available in the market. Prospective buyers are willing to pay a premium to get a new car.
How you can benefit from this unique situation
Since there is a limited number of used and new cars available, the fair market value of your car is considerably higher than what it would be in “normal” market conditions.
You could refinance your current Mount Hope auto loan at very low-interest rates and not have to pay anything out of pocket.
While all of this may sound like a great opportunity, you may be wondering what is the catch? Well, you will need to have good credit and meet all of the underwriting requirements that were set out by the lenders.
Lenders are now more cautious about approving loans, this means that your credit score should be over 650. Even if your credit score falls below that level, you can refinance your car loan but the interest rate may not be as competitive.
Assessing your credit profile
You will need to take a hard look at your credit report and identify what is causing your credit score to drop. The two most popular credit reporting agencies in Canada are Equifax and TransUnion.
Even if you have a high credit score, it does not hurt to review your report from time to time. A common reason that credit scores fall below 680 is due to a person not making their payments in full and on time.
When you receive your credit card statement, it says the due date and minimum amount due, you have to ensure that the payment is received by the due date and you are paying the minimum.
So long as you make your payments on time and pay at least the minimum, your credit score should rise to the prime territory.
Getting the right kind of help
There are many steps involved in refinancing a car loan in Mount Hope, you should not try to go it alone. What experts recommend is working with a local dealership that can help you refinance your car loan at a rate you could never access.
These dealerships are credit experts and can give you advice on how to correct any issues you may have with your credit profile. Interest rates are going to rise, so make it a top priority to contact your local dealership and book an in-person meeting with them, your wallet will thank you.
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!