There are four main reasons to refinance a car loan. Sometimes lost in the long and complicated process in buying a vehicle is getting the best loan and terms you can. Many leave this up to the car dealership to provide them a loan, or the bank they have their money at. This can leave a person with a higher interest rate than they would otherwise have gotten, and sometimes circumstances change after you purchase a car and are still paying the loan back. In either case refinancing the loan might be the best decision to make.
A big reason to refinance a vehicle loan is when interest rates have dropped from the time you initiated the loan. Even though refinancing a used car is more expensive than a new one, the new interest rate you obtain can be lower than when you purchased the vehicle.
Another factor that commonly happens is that your credit score has improved. If you’ve been diligently paying your debts and keeping your outstanding credit under control you have likely improved your score from the time that you originally purchased the car. In this case you might qualify for a more favorable interest rate. It might also be the case that since the time you got the loan something negative has fallen off your credit history, which will also have likely led to your credit score going up.
Another common reason to refinance is that you didn’t get the lowest interest rate when getting the car. In this case you can likely shop around and find a better rate from another loan provider.
It might be that you need to reduce your monthly car payment, in which case refinancing to a longer term might make since as it should reduce your monthly payment amount.
A company that offers auto refinance services is Ignition Financial. The company, based in Houston Texas, can be reached on their website slashmypayments.com. Using the Slash My Payments is simple to do, and will give you a quick answer as to whether you will qualify for a better interest rate and terms as compared to what your current auto loan is offering. They will pull your current credit score and give you an accurate figure with competitive interest rates and flexible loan terms.