Did you take out an auto loan to pay for your car? Borrowing money to buy a car isn’t a life sentence.  There are times when it makes sense to re-evaluate your loan to see if you could potentially save money by refinancing.

Refinancing a car loan involves taking on a new loan to pay off the balance of your existing car loan. Most of these loans are secured by a car and paid off in fixed monthly payments over a predetermined period of time.

When Auto Refinancing Makes Sense

  • Interest rates have dropped since you secured your original loan

The best and most common reason to refinance is to take advantage of lower interest rates.  The lower rate will mean paying less for your car over time.

Interest rates change regularly, so there’s a possibility that rates have fallen since you took out your original auto loan. Even a drop of 2 or 3 percentage points may result in significant savings over the life of your loan.

  • Your credit rate has improved

If your credit has improved since you got your existing loan, you may be able to get a better loan. You can qualify for a lower rate, lock in a low fixed rate, or possibly remove a cosigner from the loan.

Your credit improves when you make on-time loan payments or when negative items fall off your credit reports. Those successful payments can raise your credit scores and you’ll have more borrowing options. Even one year is enough time to see improvement—so it’s worth finding out if your scores have risen enough to qualify you for a better loan.

  • Your current payments are causing financial stress

If you’re feeling strapped for cash each month refinancing can help by lowering your payment. When you replace your existing loan with a lower rate your monthly payment decreases.

Another option is to increase the number of months you’re scheduled to pay back your loan which will result in lower monthly payments.  However, be aware you’ll be paying more for your car in the long run.

What You Need to Refinance

To refinance an existing loan, you need the following:

  • A new loan with better terms or pricing than your existing auto loan
  • Details about your current loan, including the current lender, your account number, and your loan balance
  • Information about your vehicle, including the make, model, year, and VIN
  • Documentation of your ability to repay, such as pay stubs or tax returns

Where to refinance

If you’ve decided that the circumstances are right for you to refinance Vantage Finance is ready to help you take the next step.

We’ve helped many customers refinance their auto loans and put more of their hard earned money back into their pockets, where it belongs. Want to see if Vantage can help lower your monthly auto loan payment? Contact us today, we will connect you with reputable lenders who can help you.