Financing your car through the dealership provided initial convenience, but now you’re literally paying the price.
Lucky for you, there are a few things to consider to help you through the process of refinancing your auto loan and receiving the best rate for your car payment.
You’ve already learned when and how to refinance your auto loan, but now it’s time to learn more about nailing down the best rate.
When considering your auto loan refinance, it’s important to have options. Not every bank or credit union is going to offer you the same interest rate. In fact, there are many factors, such as credit score, that determine your rate that will be evaluated differently depending on the establishment.
Credit unions tend to provide better rates than other banks, so if you have newly established credit, poor credit history, or you’re just weighing various options, then shopping around at various credit unions near you will help ensure you are securing the best deal.
Loan terms play a big part in establishing your interest rate and overall spend on your vehicle. However, the length of the term is going to establish whether your interest rate goes up or down.
You first must establish a monthly budget. While a shorter term is going to result in a lower interest rate, you are going to be paying more money each month. It is important to know your budget before applying for an auto refinance to determine what term you can afford.
If you choose a longer term, you may have more peace of mind for the time being as your monthly payments will be less, but your interest rate and overall cost of the vehicle is likely to increase. If you can afford a higher monthly payment, then in the long run you are saving money since the loan won’t be building as much interest.
It’s easy to settle on convenience at the dealership and stick with the offered interest rate and monthly payments. However, while it may take a little bit of time, you can save a large amount of money and enjoy debt protection options at a fraction of the cost with an auto refinance. No one wants to purposely lose money when there’s an easy solution.
Do your research and find a local credit union near you that will help you through the refinancing process and take charge of your financial future.
Choose lower cost over convenience with an auto refinance with Millstream Area Credit Union.