Refinancing your car loan could help you save money, lower your monthly payments, or both!
Refinancing your auto loan can be an effective way to save money or modify the terms of your loan. It's important to consider all your options, compare interest rates, and ensure they align with your financial goals. Check out our tips below to determine if refinancing is right for you.
When to Refinance Your Auto Loan:
Your Credit Score Has Improved
The main reason to refinance your vehicle loan is to lower your annual percentage rate (APR). If your credit score has improved since you got your car loan, you may qualify for a lower interest rate. A lower rate means paying less interest over time, potentially saving you hundreds or even thousands of dollars.
Cut Costs with Lower Monthly PaymentsRefinancing could allow you to extend the term of your loan (e.g., from 36 months to 60 months), which can reduce your monthly payments, though it may increase the total interest paid over time. This can free up cash flow to help with other expenses, like high-interest debt or student loan payments.
While lower payments might sound tempting, extending your loan term could result in paying more in total interest over time. It’s all about finding that sweet balance to help balance your current needs and long-term goals.
Consolidate Your Debt & Save
Refinancing your auto loan may help consolidate everything into one easy solution if you manage high-interest debts. For example, if you’ve got credit card debt along with your car loan, refinancing might just let you pay off that credit card while snagging a lower interest rate on your vehicle. This means fewer payments to manage each month, saving you money on interest and helping you pay off your debt faster.
Refinancing Tips:
- Check Your Credit Score: Higher credit scores typically qualify for better rates!
- Review Your Current Loan: Compare your interest rate, balance, and remaining payments to ensure refinancing makes sense. Use our payment calculator to determine how refinancing can help your budget.
- Understand the Costs: Some lenders charge fees to refinance, including application fees, title fees, or early repayment penalties. Be sure to factor these costs into your decision.
- Apply for Refinancing: Gather your personal information, proof of income, and details about your vehicle (like the VIN number, mileage, and current loan balance).
- Review & Close the Loan: Once approved, your new lender will pay off your old loan, and you’ll begin making payments under the new terms.
Start Saving Today - It’s Easy to Do
Refinancing with Magnifi is simple. Use our payment calculator to see your potential savings and apply in just 5 minutes!
Membership qualification is required. All loans are subject to approval. Loan fees apply. Rates are subject to change at any time and are based on creditworthiness. Loan payment and Annual Percentage Rate (APR) will vary based on the loan amount, term, collateral, and any fees. Maximum term varies based on credit score and loan amount. Some restrictions may apply.
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