How to Know if You’re a Good Candidate for Car Loan Refinancing

Many people get comfortable with their car payments. They simply accept the “inevitable” and agree to very high interest rates and lengthy loan terms. Many people aren’t aware of how much interest rates affect their car payments. With high interests rates, you could be adding up to $100 on your car payments EACH MONTH. Longer loan terms means a longer amount of time you’re paying that high interest.  What if you could change that? What if you could pay off those ever increasing interest rates and take some years off your loan term? You can with auto refinancing.

If this alone isn’t motivation enough to look into auto refinance, here a few guidelines of how to know if you’re a good candidate for car loan refinancing:

  • Interest rates have dropped since purchasing your vehicle

It’s easy math, if your interest rates drop, the amount your paying per month drops right along with it. Even if the interest rates have only dropped a point for two, this will make a huge difference in your payments. As an example, if you have a $10,000 car loan with a 5% interest rate over a 60 month period, your monthly payment will be around $190. However, if your interest rate drops to 3%, now you are paying $180. Ten dollars may not seem like a lot, but over the course of 60 months you will have saved $600 dollars.

Check out this website to quickly determine your monthly payments.

  • Your credit score has improved

Improving your credit score will affect many areas in your life, including your car payments. If your credit has improved since you took out your original car loan, it is time to refinance. the higher your credit score, the lower your interest rate. Pay less for your car each month. No strings attached.

Don’t worry if your score hasn’t changed much, the criteria for good credit in car loans is far less strict than the criteria needed for home loans. So don’t abandon hope yet, auto refinancing could still a great choice to help you save money each month.

  • Your loan term is longer than 5 years

Many people end up paying a lot for their cars, even when they have a low monthly payment. This is because the term of the loan is quite extensive. The longer the term of the loan, the more interest you’re paying until the end of the term. By refinancing your car loan, you can significantly lower the time you’re paying off your loans. Keep in mind that refinancing your loan may not significantly change your monthly payments. However, by taking time off your term you will save yourself a lot of money.

Finding a lender that refinances is the easiest step in the process. Here at Flatiron Finance we are ready to help you with auto refinancing whenever you need it. Save big by getting a Flatiron Finance auto refinance loan, and contact us today: