Just as homeowners take advantage of lower interest rates by refinancing their homes, car owners can refinance their auto loans to capitalize on lower rates.
“Rates are very low right now, so now is a good time to purchase a car,” said Terry Adams with the Spartanburg office of Spero Financial. “Inventory is starting to come back around. It’s not where it was pre-pandemic but we’re starting to see the demand increase.”
Spero’s Spartanburg branch alone did more than $2 million in auto loan volume last month, Adams said.
For most people, their auto loan payment is their second biggest expense each month, right after their mortgage or rent payment. But how do you know if you’ll save enough money to make it worth your time to refinance your auto loan? Here are a few questions to consider before you move forward.
1. How much time is left on your loan?
If your loan is relatively new – two years or under, then you still have enough time to save over the life of your loan and you should consider refinancing your car loan.
2. Have interest rates dropped since you got your car loan?
Just as homeowners take advantage of lower interest rates by refinancing their homes, car owners can refinance their auto loans to capitalize on lower rates.
3. Has your credit improved since you got your car loan?
Moving up even one credit bracket, from the D range to the C range, for example, could qualify you for a much lower APR on your loan.
4. Are you unhappy with the finance package from the dealership?
Maybe you got a fantastic deal on the car, but you didn’t get such a good deal on the financing. If you’re paying outrageous interest on your car payment, you are a prime candidate to refinance your car loan.
5. Are you upside-down in your car loan?
Being upside-down means that you owe more money on your auto loan than the car is worth. You may be able to correct this situation if you refinance your car loan.
6. Does your current loan have any prepayment penalties?
If your existing car loan charges you a hefty penalty for paying off your loan early, it could wipe out any potential savings you’d get from refinancing.
For more information, visit spero.financial.com.
Disclaimer: Information shared in this segment is for educational-purposes only and is not intended to provide specific advice or recommendations for any individual. Auto loan eligibility is subject to credit approval. Terms and conditions may apply.
