Tips for Refinancing Auto Loans

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If you’re trying to rebuild your credit, then an auto loan is an excellent way to start, but you could find yourself stuck with high-interest rates while you establish yourself. If you’ve been paying on your loan for a few months, you might be able to save big by refinancing your contract with a reputable lender. There are a few things to keep in mind before you sign on the dotted line.

Follows These Tips and Lower the Interest on Your Auto Loan

Refinancing your auto loan doesn’t need to be scary. Follow these tips to get a better rate and put a little wiggle room in your monthly budget:

  • When Should You Refinance? There’s no set time to refinance your auto loan, but 3-6 months of on-time payments can make a big difference in your credit score and help convince lenders you’re a worthwhile risk. (Depending on the lender, you may be able to refinance if you’re a bit behind on payments. This will prevent you from defaulting and possible repossession, which can be expensive to resolve once it happens.)
  • How Much Can You Save? That depends. If you know that a refinance is in your future, start checking sites like CarChex for changes in the market. When you see that your interest rate has dropped by at least one percent, it could be time to fill out an application.
  • What Steps Should You Take? Your new lender will require you to have an application filled out in the same names with the same spelling as those on your current auto loan. You also need to have your loan account number on hand, the current vehicle’s correct information including year, make, model, and VIN number, and proof of income.
  • How Much Can You Finance? Your new lender will likely require that the loan be at least $7500 with the higher end determined by your ability to pay, but no more than the current value of the vehicle.
  • Watch the Fine Print. Some lenders will insert hidden fees and early repayment penalties into refinance contracts. Read your new contract carefully and make sure you know exactly what you’re getting into, so you don’t get taken advantage of.

How Can Xpress Cash Help?

Our tips for refinancing your auto loan can save you big in the long run, but if you need access to quick cash for emergency expenses, Xpress Cash can help. Visit one of our local branches in Michigan, Wisconsin, or Idaho and speak with one of our knowledgeable credit counselors to see how easy it is to get the money you need today.