5 Reasons To Refinance Your Car Loan

Since the economic recession hit a few years back Americans are looking for ways to reduce their debts, and save money. They have been selling their valuables, refinancing their homes, but what about refinancing your car loan? Yes, even with bad credit auto refinancing is possible and can help you keep more money in your bank account!

Why You Should Refinance Your Car Loan

Below we have laid out the top five reasons an auto refi might be best for you.

Lower your interest rate

Too often we hear of debtors getting an auto loan at extremely high interest rates and long loan terms which can add up to a lot of extra money being spent on a depreciating asset. Many refi loans are granted with lower interest rates which mean more of your money will be applied to the principle balance and less toward interest.

Lower your monthly payment

Interest rates and monthly payments go hand-in-hand and therefore when you lower your interest rate; you lower your monthly payment as well. There for if you have improved your credit rating since your original loan was obtained a refinance can lower your interest points and help save you a lot of money each month. If you can't get a better interest rate you can extend the loan terms to lower the payments, also.

Get right-side-up on the loan

Many people become upside-down on their loan within in the first year or two causing the loan balance to far exceed the value of the vehicle. If you apply for an auto refinance loan and put down extra cash to get up to the value of the car, you can get right-side-up again. With a new lower payment and lower interest rate you can hopefully keep the balance on the new loan lower than the value of the car.

To build up credit

If you have not been able to rebuild your credit due to high monthly payments a refinance can help you. With a lower interest rate (or extended loan terms) resulting in lower monthly car payments you can budget them into your finances. The new payment will be easier to make each month in turn helping your credit score raise to the "prime" category.

Pay off car sooner

When you refinance an auto loan, the lender will sometimes give you the opportunity to set the time period that you intent to pay off what you owe on the car. You can decide a shorter loan term than the original loan, or you can choose a longer one for lower payments (just in case an emergency happens) but continue to make the same payment you are making now. The extra money will be applied to the balance and the loan will be paid off quicker.

Online Auto Refinance Lenders

Finding a lender to work with your refinance doesn't have to be time consuming and difficult. Using the internet from the comfort of your own home can be beneficial to you in many ways. It will not only save time and gas, but it will give you a greater chance of approval with the ability to apply with multiple lenders at once. Here at SmallerCarPayments.com we work with a network of local refi lenders that can give you your best chance at a loan approval with their tools and experience in the subprime credit field. Apply online today to see if you could be approved.