When is it worth it to refinance a car loan?

I recently overheard my brother talking to my mom about how he wants to refinance his car loan. It got me thinking about when I should consider refinancing my loan. How do you know when it’s worth it to refinance a car loan?

Answer
You’ve probably heard people say how refinancing can offer many perks, and that is true! That said, it is not always the best solution for everyone.
Some reasons why you want to refinance a car loan include:
  • Reducing your interest rate: If you have good credit, you may qualify to apply for lower rates on your new loan.
  • Lowering your monthly loan payment: Refinancing can help reduce your monthly loan amount and help you save more money on your monthly budget.
  • Changing your loan term: If you would like to lengthen your loan term, refinancing can help match this need.
  • If your vehicle is less than 10 years old: Many lenders limit the age of the vehicle that qualifies to refinance.
  • If you do not have an upside-down loan: An upside-down loan is when you owe more than what your vehicle is worth. If you owe less on your loan than what the car is worth, you qualify for refinancing.
If you think refinancing will help you, start your search with the Jerry app. You can compare quotes from multiple lenders without worrying about your credit history. Avoid the hassle of researching and sending documents to potential lenders. Jerry’s app instantly connects you with top companies and takes into account your specific financial needs to find a loan that best meets those needs.
Good luck refinancing!
Phoebe Mah
Answered on Nov 23, 2021
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