A car loan is a huge responsibility, and sometimes you’ll find that you’re running out of money to pay for it midway and unnecessary fees and bad warranties have left you in a bit of a financial predicament. If you are thinking about refinancing your car loan, do not consider this lightly, jumping too fast into refinancing your car loan can be an unwise money move. Ask yourself these essential questions before refinancing your car loan to ensure you’re prepared and making the right move.
How Soon Can I Refinance My Car Loan?
When you refinance car loan, time is an essential factor to consider. If you’ve decided to pursue refinance early on in your current car loan, this does not give your credit score a chance to improve, nor does this allow you to accurately see if this new loan will work within your financial budget.
Is Overextending My Car Loan Terms A Good Idea?
While overextending your terms may mean you’ll be paying less per month, is this a good thing? The answer in the long run is often no. A longer duration of monthly repayments will ultimately mean paying a lot more money to the bank.
Will My Credit Score Be Affected When Refinancing My Car Loan?
More often than not, the answer to this is yes. It could be positively or negatively affected. If your credit score was low when you applied for the initial car loan, but you have been paying it off religiously, you may find your credit score has improved slightly. If your credit score is too low, you may end up wasting money on the refinance application when it is denied.
How Do I Find The Most Optimal Interest Rates?
To find the best interest rates, you need to take the time to research different credit and lending websites and thoroughly browse through them. Research credit unions and banks to see what they offer. Then, check with your current lender to see what interest rates they have available. It’s crucial to never jump at the first interest rate you find.
Other Questions To Ask Yourself
Furthermore, ensuring that refinancing your car loan is the best move for you depends on the following questions:
- Will LTVs and DTIS affect my car loan and how?
- How will the interest rate affect my car loan payment?
- Have I read the fine print and am I aware of the hidden costs?
- Are refinance rate reductions and discounts available?
We Can Help You Find The Right Answers!
For those seeking further answers on their journey to refinancing their car loan, contact our financial experts at ZEP Finance. We recommend you do your homework and be prepared when it comes to the refinance of your car loan –we’re here to help you!