Not Happy with Your Interest Rates? Maybe It’s Time You Refinanced
Picture this scenario: you’ve been laid off from your job, forcing you to fall behind on your bill payments, which subsequently lead to your credit score taking a ghastly hit. We’ve all been there.
Eventually, you were able to find gainful employment, but the job is miles away from home, and there aren’t any buses that will get you there in a timely fashion. In order to keep your position, you sought an auto loan specialist like Auto Loan Solutions to help you get pre-approved for a car loan despite your poor credit score, and were able to purchase a vehicle, albeit one accompanied by higher interest rates than you’re normally accustomed.
But just because you purchased your vehicle with these rates, doesn’t mean you have to pay them throughout your entire term. If you’ve managed to pay your bills on time for the past twelve months, then chances are your score has improved, and you’re most likely eligible for refinancing the terms of your auto loan. Even if your score has remained stagnant, refinancing may still be a palpable option.
Is Refinancing Right for Me?
Of course, there are several cases where refinancing your vehicle wouldn’t be the safest, or smartest, bet. Most often, people attempt to refinance because they’re looking to increase the number of months they have to pay back the loan, lower their monthly interest rate, and lower their overall monthly payment.
In order to determine if refinancing your loan is right for you, however, make sure to ask yourself the following questions:
1. Has My Credit Score Improved? If you have been utilizing good credit-building habits over the last year, and have kept up with your payments in a timely and responsible fashion, your credit has likely improved. Review your score first to make sure; if it has, then better interest rates are in your line of vision!
2. Have Interest Rates Dropped? If interest rates have dropped a couple points since you took out your initial auto loan, refinancing could save you some serious coin. Even the tiniest percentage point is worth the effort.
3. Were The Rates I Initially Received Less Than Stellar? If you applied for a car loan with a low credit score, the interest rates you signed off on were probably less than ideal. Never fear, though – if you’ve been paying your bills on time since then, then refinancing is definitely the right decision as your credit score has likely improved.
4. How Much Debt do I Have? If you are still in a serious amount of debt (click here for tips on how to efficiently eliminate your debt) and are trying to pay it off, refinancing right now may not be the best solution. Lenders assess how much you owe to banks and creditors, and even if your credit is better than it was a few months ago, having debt will deprive you of accessing the optimum rates when refinancing your loan. Maybe try again in a couple of months when you’ve paid off a substantial chunk?
What Now?
If you’ve asked yourself these questions and are satisfied with your answers, then go ahead and contact your original lender, and send them the refinancing deal with your new lender – unless you decided to refinance with the same lender. If it’s the former, get the lien on your vehicle transferred to your new lender, so that your old loan is effectively obsolete.
Of course, you’ll have to repeat some of the same steps as when you originally took the loan, like applying to refinance, gathering certain documents like paystubs and personal identification, and speaking to a specialist about reviewing your application. At Auto Loan Solutions for example, we’ll be in touch with you within minutes after you’ve applied.
If you aren’t satisfied, and your credit remains in poor shape, then perhaps its time to adopt some of these great credit-building habits!
1. ALWAYS Pay your bills on time! Automatic payments do wonders if you’re forgetful…
2. BUDGET! We cannot stress this enough. Following your budget to the letter is what separates people with good credit from people with atrocious credit.
3. Use Your Credit Cards Responsibly. When lenders see that you spend on your card, but pay it off each month, it shows you can be trusted to spend, and also, to pay your bills.
Nearly Everyone Can Get Refinanced
Typically, finding a lender to refinance your auto loan is a rather simple endeavour. However, it does depend on the terms of your original auto loan, so always make sure that you understand these terms before signing any contract.
If you’re interested in refinancing your auto loan, apply now with our team at Auto Loan Solutions. We’ll work round the clock to find the best interest rates affordable to you.
