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5 Key Benefits to Refinancing Your Auto Loan

When you first signed the documents for your new car, refinancing your auto loan was probably the last thing on your mind. Most people simply assume that the original creditor holds the loan until it’s paid off. Much like a mortgage, though, auto loans can be refinanced. People choose to do so for many different reasons; here are 5 key benefits to refinancing your auto loan.

Reduce Your Interest Rate

If you qualified for a less than ideal interest rate when you first bought your car, you may be shocked at the low rate you could qualify for now. If your credit score has increased, you’ve gotten a raise at work, or loan interest rates have fallen, you’re probably overpaying for your current auto loan. By refinancing, you’ll reduce the interest rate, which saves you money in the long run. Credit Unions typically have much lower interest rates than other lenders because they’re controlled by the members.

Reduce Your Monthly Payment

Sometimes, you’re not worried about saving money over the length of the loan – you’re more concerned with reducing your monthly payments so you can get some wiggle room in your budget. Refinancing your auto loan can help you do that, too. In some situations, you can refinance the current amount due on the loan for a longer term so your monthly payment goes down.

Pay Your Vehicle Off Sooner

Likewise, you can also do the opposite: refinance the vehicle at a lower interest rate for a shorter term, possibly keeping your monthly payment the same or increasing it a bit so you pay the vehicle off faster. If you’re trying to pay off debts or worry that the vehicle won’t last as long as the loan term, this might be the best option for you.

Add Policies to Your Loan

When you originally bought your car, you were probably offered GAP coverage and Mechanical Breakdown Protection on your vehicle. It’s easy to bypass these options when you’re wrapped up in the excitement of purchasing a car. Now that you’ve had time to think it over, you may regret not adding these policies when you had the chance. When you refinance, you usually have the option to add GAP or MBP policies, so you’ll have peace of mind in case your car needs significant repairs down the line. And you can get GAP Protection through Members Plus Credit Union!

Pay and Manage Your Loan Easily

Some lenders are notorious for hassling their customers. Whether it’s difficulty making payments or trouble talking to an actual person when you have a question about your loan, there’s nothing worse than feeling like you’re just another customer in a long list. By refinancing your auto loan at your Credit Union, you’ll have more personal service. Customers often love the easy payment options, and you can walk into a local branch and talk to a representative if you need help.

If you think you should consider refinancing your auto loan, don’t hesitate to contact us. We can go over the rates and options that are available for your situation. The process is simple, and we’ll guide you through every step.

Sources:

http://www.mycreditunion.gov/about-credit-unions/pages/interest-rate-comparison.aspx

http://www.bankrate.com/finance/insurance/car-gap-insurance-is-it-right-for-you.aspx


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