When Can You Refinance an Auto Loan?

Car drivers often ask about the process of refinancing their auto loan, and when they may be able to do it. Our skilled Davey Auto Sales team thought it would be worthwhile to run through these popular questions we get asked, and help make your decision to refinance, or when to know if you should, a bit easier. First thing’s first, how do you know when you may be able to refinance your loan? In general terms, this is what you’ll need to have as your backing:

• A proven source of income
• A proven legal residence
• Financial ability to handle the payments (debt-to-service ratio)
• Minimum credit score/history

READ MORE: Can You Get a Car Loan After Bankruptcy?

The Benefits of Refinancing an Auto Loan

Why should you refinance your auto loan? There are a number of reasons, including being able to get a lower interest rate, having the loan term extended, as well as being able to remove a co-signer or adding a payee if your situation has changed from the initial loan.

• Lower Interest Rate: We all want to see your credit score improve, and if it has over time you may be able to enjoy a lower interest rate. These often work in only small percentage price changes, but even a slight decrease can help greatly.

• Extended Loan Term: If you have a tough time paying the monthly amount, extending the term may be able to get you a lower amount that you’ll have to pay each month. Spread out that money and allow you a more comfortable month-to-month payment plan.

• Remove a Co-Signer: If you previously had someone co-sign with you to initially qualify for the loan, but no longer need them on it, refinancing is a route to remove said person from the loan, particularly useful for a parent who did so on a teenager’s vehicle.

How to Know if You Should Refinance an Auto Loan

Refinancing is not in the cards for everyone, but how do you know if it is an avenue for you to go on, and that you’ll actually be able to benefit? Ask yourself the following questions:

• Lower Interest Rate: We all want to see your credit score improve, and if it has over time you may be able to enjoy a lower interest rate. These often work in only small percentage price changes, but even a slight decrease can help greatly.

• Extended Loan Term: If you have a tough time paying the monthly amount, extending the term may be able to get you a lower amount that you’ll have to pay each month. Spread out that money and allow you a more comfortable month-to-month payment plan.

• Remove a Co-Signer: If you previously had someone co-sign with you to initially qualify for the loan, but no longer need them on it, refinancing is a route to remove said person from the loan, particularly useful for a parent who did so on a teenager’s vehicle.

Refinance Your Auto Loan at Davey Auto Sales

Do you think you’re eligible to have your auto loan refinanced? Our finance team here at Davey Auto Sales can help set you on the right track. The financial staff at our dealership have years and years of experience working with customers just like you, who aim to find the best loan that works within their needs. Contact our team, today, to learn more.