When should I refinance my car loan?
You should refinance your car loan if your credit and income have improved since you first took out the loan. Even if it hasn’t changed, refinancing can also help if you think you can qualify for a lower rate with another lender.
Generally, you should avoid refinancing if your financial situation has changed for the worse. And if your lender charges a prepayment penalty, refinancing can make your car loan more expensive.
Considering refinancing if
- Interest rates have dropped
- You qualify for a lower interest rate
- You need a smaller payment
- Your credit score has increased
- Your income has improved
- Your debt has decreased
- You want to remove a cosigner
Avoid refinancing if
- Your lender charges a prepayment penalty
- You’re underwater on your current loan
- You don’t meet the minimum requirements
- You’re almost done paying off your current auto loan
- You plan on borrowing more in the future
- You don’t have solid financial footing
I’m currently in a balloon rate auto loan and I’m almost certain that I will not be able to afford the last large payment. I have another year and a half left. Can I refinance and if so how soon before the loan is over should I start? My credit is in good status. Please advise.
Thank you for reaching out to Finder.
1st you may want to talk to your lender on moving out and having another company refinance the loan. This may open up options that may be available to you from your current lender. If that does not work to your advantage, you may then check our page on lenders that may refinance your loan and apply with them. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!