Financing is a great way to purchase a vehicle without spending much money. However, financing comes with a high interest rate and higher costs if your credit is low. If you were in this situation when you bought a car, the good news is that it is possible to refinance a car loan if your credit improves or rates drop. Keyes Hyundai goes over the benefits and how to get the process started.
When Refinancing Makes Sense
There are many reasons to consider refinancing a car loan. If you have significantly improved your credit score, this can give you a much more favorable interest rate, reducing your monthly payments and saving you quite a bit of money. A lower interest rate may also let you pay off the loan faster, further cutting your costs.
When to Rethink Financing
It may not always be a smart idea to refinance a loan. If the new interest rate isn’t significantly lower, it might not be worth it. Refinancing fees or a prepayment penalty could negate any potential savings. You also have to know how much you owe. If this is more than the vehicle is worth, refinancing probably isn’t a great idea and may not even be an option.
The Refinancing Process
Refinancing an auto loan is a relatively simple process. You should start by shopping around for rates. When you compare offers from different lenders, this will let you choose the best deal. Next, it is vital to understand the loan terms, including the interest rate and fees. Finally, you should use a refinancing calculator to determine how much money you can save with the new terms.
Refinance Your Car Loan in Van Nuys, CA
If you’re looking to refinance your loan, Keyes Hyundai in Van Nuys, CA, can help you do it. Get in touch with our financing department for more information. We’ll help you run the numbers and start the process if you decide it makes sense for your finances.
