Refinancing can be a great financial management strategy, but a lot of people think it isn’t an option. RefiJet is here to help you answer the question, when should you consider refinancing your vehicle?
It’s a common misconception that refinancing is only worth doing if your credit score has gone up a lot since you first got the loan. Although an improved credit score (and potentially lowering your interest rate) is one really good reason to refinance, there are many other reasons to refinance that can help you get a loan that is a better fit for your current needs.
Here’s a shortlist of some good reasons to answer the question, when should you consider refinancing your vehicle? – and credit score is only one of them!
Your credit score has increased
You’ve been doing all the right things to improve your credit and you are seeing the results. A higher credit rating can lead to lower interest rates and potentially even lower monthly payments.
You’ve been making your car payments consistently on-time
Even if your credit rating hasn’t improved, if you are making your car payments on time, there are lenders that will try to work with you to meet your end goals for a refinance. This can be in the form of lower interest rates, lower monthly payments or even extending the term to take some immediate financial pressure off of you.
You want to reduce your monthly payments
There are different ways to reduce you monthly car payments. You can lower your interest rates or extend the term of your loan. If you have a lower mileage car (for its age), you might be able to reduce your payments purely based on the condition of your vehicle.
You want to get cash back from your current loan
If you’ve already paid a decent portion of the value of the vehicle, you could be eligible to refinance the car for more than the amount remaining on the loan. That “extra” amount would be cash back to you that could help pay for other large expenses.
You want protection for your loan or your vehicle
When it comes to your vehicle, you don’t want surprises. Adding an Extended Service Contract (ESC) to take care of unexpected repairs or Guaranteed Asset Protection (GAP) to minimize your financial risk if your vehicle is in an accident or stolen is a great reason to refinance your vehicle.
You want to add or remove a borrower
You might have an ex-spouse as a co-borrower that you want to remove. You could have someone you want to add that could improve the way the loan looks to the lender, potentially giving the lender a reason to lower your rates or payments. The point is that life changes quickly.
You think you got a bad deal when you got your loan
Purchasing your car can be a very stressful situation. Having walked out of the dealership with a loan that might not be the best you could have gotten is not unusual. Sometimes you just don’t have a choice if you want to leave the dealership with the car. It’s ok. You may be able to refinance your loan and get out of your bad deal.
You have a feeling that it would be fun to talk with a RefiJet concierge
We completely agree.
So, what should you do?
Assuming the timing seems right for refinancing, you can contact RefiJet to see what your choices are. We can identify various options for which you qualify, then you get to choose the option that works best for you.