When you’re looking to put some money back into your budget, refinancing your auto loan is a great place to start. By extending the term or lowering your interest rate, you can reduce your monthly payment. When you do both, the savings can really add up. Here are some of the ways a refinance can work in your favor.
All the Positives
When you refinance your auto loan, there is a chance that you can lower your interest rate, which can save you money by decreasing the overall cost to finance the car or truck. Even if you keep the same term on your loan, you could pay less overall. However, your monthly payment might not decrease.
If you are looking to lower your monthly payment, nothing beats refinancing. However, depending on the age of the vehicle and qualifying term, your monthly savings can vary.
Do the Math First
Not all vehicles are eligible to be refinanced or should be refinanced. If your car or truck is not worth what you owe, then a refinance might not work for you. Additionally, when you refinance and extend your term, you are essentially paying interest over a longer period of time. If you have already made three years of payments on your current loan and then refinance for another seven years, you will have been paying on your vehicle for a decade. That does add up. The hope is that the savings on the monthly payments are worth the cost. Just do the math or stop by any branch and ask. We’ll be happy to show you the numbers and help you decide if a refinance is right for you.
At St. Helens Community Credit Union, we can help you refinance your car or truck with terms of up to 84 months. We’ll even let you wait 45 days until making your first payment. Apply online, call 503.397.2376, or stop by any branch.