Individuals are always looking for ways to save money and build a stronger financial portfolio. One way to do this is to refinance your auto loan. Below are four main reasons why refinancing your vehicle can be a beneficial decision to make.
Lower interest rate: Perhaps the main reason people choose to refinance their vehicle is to lock in a lower interest rate. If your credit score has improved or federal interest rates have fallen, it may be a good idea to refinance. This saves you money on a monthly basis and will hopefully allow you to pay off the loan faster. Although any type of refinance takes time and energy, getting a lower interest rate is worth it.
Modification of the monthly payment: It is more common for people to want to lower their monthly payment. They can do this by refinancing with a lower interest rate or by extending the term of the loan. On the other hand, some people want to increase their monthly payment in order to repay the loan more quickly and to anticipate any depreciation. Whether you want to decrease or increase the monthly payment, you must refinance to do so.
Lender incentives: Many lenders offer incentives when people refinance their car loan. Incentives often take the form of cash. For example, Champion Credit Union offers a cash back incentive equal to 2% of the loan balance up to $1,000. These incentives are only available to people who refinance with Champion Credit Union. Other institutions have similar incentive programs.
To improve a credit rating: A healthy car loan can ultimately improve your credit score, even if it may lower it initially. If your plan is to build a higher credit rating, you may need to refinance in order to get your car loan in check. Whether it’s lowering the interest rate or changing the monthly payment, so you don’t fall behind, a solid car loan with on-time payments is a great contribution to a person’s overall credit portfolio.
When assessing your own financial situation, consider auto refinancing. Not only is the process generally painless and efficient, but it can also save you money and leave money in your pocket if your lender offers an incentive. Every time you make a decision that will improve your financial portfolio and credit score, your future self will thank you.
For Champion Credit Union’s cash back offer, the cash back ¹ is 2% of the loan balance up to $1,000. The Cash Back Incentive Program is only available for auto loans that are not currently funded by CCU. Existing auto loans currently funded by CCU are not eligible for this incentive program. Minimum loan amount $5,000. All loan approvals are subject to normal underwriting guidelines. Rates, payments and other terms are based on loan type, collateral, loan amount and creditworthiness. Not all members will qualify for the lower rate and payment may not be lower for each member. Amounts earned can be reported to the IRS. Learn more by clicking HERE