Walking into a dealership knowing that you’ll be leaving with a new vehicle is an exciting experience. The peace of mind of not having to worry about car trouble and, of course, that new car smell are two great benefits of purchasing a new vehicle.
Unfortunately, when purchasing a new vehicle, some of us also end up with a high interest rate, especially if we go through a Harlingen Bank. VFCU is here to offer some helpful tips on the right time to refinance.
Quit worrying about that high interest rate car loan you have! Learn how you can refinance with Valley Federal Credit Union and drive away with more savings!
When to Refinance
With interest rates so low, refinancing your vehicle might have crossed your mind already. A recreational vehicle, boats and motorcycles also qualify for loans that you can refinance at a lower rate with VFCU.
As a credit union, we do our own loan approvals, which is better for customers.
Refinancing can save you hundreds or maybe even thousands of dollars over the lifetime of your loan. One of the easiest ways to know if you’re in need of refinancing is to see if your rate is at about 6%. Below are some helpful tips when considering to refinancing your vehicle:
- If interest rates have taken a nosedive since you purchased your vehicle, consider refinancing to save thousands of dollars. Always remember that rates are, for the most part, considered for used car loans and have a higher rate than those for new cars. Also, even a decrease of 2% can make a huge difference in your payments.
- Interest rates of over 15% for those with bad credit or no credit are not uncommon. If you have shown financial responsibility and have made payments on time, you could persuade a lender to refinance a loan at a lower rate. We recommend checking your credit score before shopping around. If your credit score has improved or hasn’t been tarnished, you may be able to secure a lower refinancing rate.
- A high score or solid credit history won’t necessarily mean you’ll walk out with the best deal after buying a vehicle. Loans sourced from the dealer usually have a higher interest rate. Keep this in mind before signing on the dotted line.
Do Your Research
Refinancing isn’t for everyone. If your vehicle is worth much less than the remaining loan balance, a lender will probably think twice before lowering your interest rate. Before looking around, check your vehicle’s value.
Other requirements that could be a problem are the vehicle’s age and the balance remaining to be refinanced. Some lenders will not refinance a loan if the vehicle is over seven years old, the amount is less than $8,000 or if it’s no more than $40,000. Consumers should also determine if their vehicle loan has any penalties for paying off early.
Be Wary of Tradeoffs
Remember to call your lender to request the current payoff for the loan. This is the exact amount you’ll need to refinance. It’s also a great way to compare the amount to the vehicle’s value, which will help you determine if the loan is worth it. If you’re in search of a vehicle to take the family on a long-needed vacation, then ask about our signature loans before summer is over!
Never forget that lenders will try to collect the profit from the interest rate as quickly as possible. Loans are structured to collect interest during the first term for these reasons:
- If you default
- If you suffer an unfortunate event
- If you refinance
There is no required amount of time to refinance your loan. The younger the loan (with a high interest rate), the more money you’ll save by refinancing. Hinojosa says VFCU offers great incentives to refinance your vehicle.
“We have some great deals for financing vehicles in July. Keep your eyes peeled, and you could end up with extra cash in your pocket”
- Contact a Credit Union Instead of a Harlingen Bank
Don’t get a feeling of buyer’s remorse because you signed a deal that’s less than spectacular. VFCU is here to help refinance your car loan and lower your monthly payments at the same time! Call or visit our credit union in Brownsville for more information on our services today.