Here is a little financial tip that I’ve used in the past but I keep forgetting about. Refinancing an existing auto loan to lower interest rates and monthly payments.
I just got an email that a client was instantly approved for an auto loan refi and that’s good news. You see when this particular person bought their car their credit score and credit report was less than perfect and interest rates were higher. However, in the mean time they have worked hard to improve their credit score and rates have dropped.
People that are perfect for an auto loan refinance are those that have a good credit score but can see some financial belt tightening coming in the near future. By reducing the car payment it gives you more breathing room each month. And behind the rent or mortgage payment, the car payment is usually pretty steep.
Now if you refinance you car loan it doesn’t mean that you can’t keep sending your current monthly payment to pay it off even earlier, it just means that if the economy caused you some financial pain that you could fall back to a lower monthly payment without being in default. And once things improved, you could resume your accelerated repayment schedule.
I’ve done this myself in the past. I had purchased two cars at the same time, what was I thinking? Last time I ever buy a new car. Then a couple of years latter the interest rates had dropped. By refinancing them both I lowered my combined monthly payment by some $350 and saved 3% on the interest rate. Hey, if I don’t have to pay more, why would I want to? Seriously, look into refinancing your auto loan now.