Should I Refinance My Auto Loan?

Have you been thinking about refinancing your auto loan but are not sure if it’s the right thing to do financially? To give you an idea, refinance is a financial term used to replace an existing loan with a new one, usually with better terms, such as a lower interest rate or monthly payment.

Under the right circumstances, refinancing an auto loan can be a smart financial move that could potentially save you money in the long run. Before you begin the process, CCCU is sharing a few things to consider before you decide to refinance your auto loan.

You have positive equity on your auto loan.

If your vehicle’s value is more than the loan amount, it means that you have positive equity. If you are looking to pull cash-out of your loan, this puts you in a good position with lenders to offer you more favorable loan terms and provide cash-out options with the equity.

You want to reduce your monthly payments.

1. One of the most common reasons people decide to refinance their auto loan is to lower their monthly payments. There are two ways to lower your monthly payment:
2. Extend the loan term – this will lengthen the life of the loan. Be aware, this may equate to paying more interest in the long run.
   Qualify for a lower interest rate – if your credit score has increased since the time of the original loan, you may now qualify for a lower interest rate, which will decrease the amount of the monthly loan payment.

Use our auto refinance calculator to see if refinancing will lower your car payments.

Refinancing your auto loan

Before you sign the dotted line, make sure that you clearly understand the terms of your new auto loan. Read the fine print carefully and ask any questions you may have to ensure you’re getting a loan that meets your needs and fits your budget.

At CCCU, we have auto loan options to fit you wherever you are on your financial journey. Please visit CCCU’s Auto Loan or contact us at 702-228-2228 to learn more about our refinancing program.