What's an Auto Loan Refinance and Can it Save me Money?

People are used to the idea of refinancing a home to pay less in interest or become mortgage-free sooner, but many are unaware that you can refinance an auto loan, too!

 Why you might want to refinance your auto loan
There are many reasons you might benefit from an auto loan refinance:

• Your credit score has gone up. You might have done some hard work to boost your credit score (congrats!), and as a result, could qualify for a better rate than when you initially opened the loan.

• Rates are better. Rates are currently at historic lows and could be more competitive than what was available to you several years ago.

• You just didn’t get the best deal. Sometimes in our excitement to get in our new ride, we sign on the dotted lines without getting the best deal. No shame! It’s never too late to right a financial misstep.

• You want to lighten up your monthly budget… In many cases a lower interest rate might result in a smaller monthly payment, too, adding flexibility to your budget.

• …And/or you want to pay your car off sooner. Similarly, a better rate could mean you’re able to pay off this debt faster.

When is refinancing not a great idea?
If you’re on the fence, our lending team is happy to go over your unique situation and make recommendations as to whether an auto loan refinance makes sense. That being said, tread carefully if you are upside down on your vehicle (meaning you owe more on the loan than your vehicle is worth), as it might make more sense financially for you to make payments until the loan balance equals the value of the car or truck. Additionally, if you’re nearing loan maturity, it may be best to finish paying your loan as most of the interest is paid at the beginning of the loan term. You want to maximize your savings, after all!

Is refinancing my auto loan difficult?
Mortgage refinances are notorious for requiring lots of paperwork and taking some time. In contrast, auto loan refinances can be done very quickly – usually as fast as a day! And paperwork is minimal, often limited to just proof of income, current auto insurance/vehicle registration, and a 10-day payoff from your current lender.

Think an auto loan refinance might be beneficial? Contact us today at 920-722-2122 to learn more and apply or stop by our branch to meet with a member of our lending team.