When is it a good idea to refinance a car loan?

I am a mom of four kids, ranging from ages two to thirteen. Raising so many young ones has strained my budget and I want to find ways to save. Can refinancing a car loan be a good idea to save money?

Answer
Yes, refinancing a car loan is one way to save money and reduce your monthly payments. Be mindful that auto financing will not be the best option for everyone’s financial situation.
It is a good idea to refinance a car loan when:
  • You want to lower your interest rate: You can qualify for lower rates if your credit has improved since you signed your initial loan.
  • You are interested in revising the length of your loan: You can shorten or lengthen your loan term.
  • Your vehicle is less than 10 years old: Lenders limit the age of a vehicle to qualify to refinance.
  • You owe less than the vehicle is worth: If you owe more than what your vehicle is worth (also known as an upside-down loan), you will not be eligible to apply for refinancing.
Starting the process of refinancing your car loan can be stressful and confusing. If you’d like some help, download the Jerry app and instantly be connected with top lenders that will give you the best rate for your financial situation. On average, car owners pay $85 less every month by refinancing their auto loan.
Before you know it, you will be saving hundreds of dollars each month!
Phoebe Mah
Answered on Nov 23, 2021
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