Refinancing Information
It's obvious that the biggest reason a person might decide to refinance would be a financial one. If you're paying on a loan that has an interest rate of 6% and find one with an interest rate of 4%, it makes sense to make the switch. By refinancing, you can save hundreds or even thousands of dollars. So, lower interest rates are definitely a good reason to refinance.
Another way in which refinancing your car could save you money is if your credit score has improved since you made the purchase. Having a better credit score can help you get a better loan, again saving you money.
What is Refinancing?
You already know that in order to finance a car, most people need to take out a loan. But what if a little ways down the life of this loan, another better loan comes along? Refinancing is when you sign up for a new loan one with better financial benefits and use that one to pay your old loan off. Now instead of paying the original loan, you're paying off the new one.
Is Refinancing Ever Bad?
Before you refinance, you need to answer a few questions. For instance, does your current loan have an early termination fee? If so, it may not be financially worth it to make the change. You also want to avoid refinancing if the new loan will have a longer term than your current one. Loans with longer terms may offer smaller payments, but in most cases, you'll ultimately end up paying out more.
Ready to Refinance?
If you think refinancing is the right option for you, start searching for lenders - like credit unions - who will refinance. Or, visit us at Rudig Jensen Ford CDJR and we can help you explore all of your refinancing options.
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