The Benefits of Car Loan Refinancing in Campbellville

The Benefits of Car Loan Refinancing in Campbellville

Posted on September 16, 2021

Refinancing an auto loan isn’t something to be done lightly but, in some situations, it can offer some genuine benefits. That’s what today’s post is all about.

We asked our Campbellville auto loans team to outline some of the key benefits of car loan refinancing and how to do it.

Benefits of Car Loan Refinancing in Campbellville

We would definitely not recommend refinancing your auto loan for the sake of it or on a whim but there are a few situations when it can give you what you need.

Those situations include:

To lower your monthly payments

You can refinance your auto loan for a lower amount using what you have paid off so far or lengthen the term so your payments are spread out for longer.

Both result in a lower monthly payment which can free up essential cash for any reason you might need it.

To extend the loan term

Extending the term has a similar effect to lowering payments. You can refinance your auto loan so you take longer to pay it off, which lowers your monthly payments.

Longer loans do cost a lot more in interest over the term but can make the here and now more affordable.

To get a better interest rate

There are two main ways to get a better rate. If the prevailing rate has fallen significantly or if your credit score has improved enough to help you qualify for one.

It would take a serious rate drop to make refinancing worthwhile in many situations but it’s another way to go.

If headline interest rates have dropped, refinancing could save you money each month and over the term.

If you have a bad credit car loan and can now qualify for a standard loan, you could also make savings.

Any significant improvement in your credit score since you got the original loan can also mean you qualify for better rates.

To consolidate debt

Rolling up all your debt into a larger auto loan is another way refinancing can benefit you.

If you have equity in your car, you can refinance up to its value to free up some cash to pay off other debt.

For example, if you had a loan of $10,000 but your car was worth $15,000, you could borrow that extra $5k to pay off all your credit cards, settle a payday loan or something else.

As long as you can settle the debt in full, this is another good reason to refinance.

To free up some cash

You can use a similar method to consolidating debt to free up some cash for something else. Need expensive house repairs? Want a new deck or extension? Need a cash injection for something else?

If you have equity in your car, you can refinance to get it.

Refinancing depends on you having a good credit score, being able to afford the new loan amount if you’re increasing it and having a stable financial situation.

Otherwise, it’s easy!

Contact Unique Chrysler for help, advice and competitive Campbellville car finance and leasing.

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