High Interest Car Loan? Refinance!
June 29 2015, Auto Loan Kelowna
Get Rid of That High Interest Car Loan
If you’ve been paying off a high interest car loan for a couple of years, you might be able to save a lot of money by refinancing your loan and getting a significantly lower interest rate.
If you have a credit rating that’s less than perfect because of missed loan or bill payments, a divorce, or a bankruptcy, when you apply for a loan you typically have to pay a higher interest rate than someone with an excellent credit rating would. That’s because lenders see you as more of a risk to default on your loan so they charge you more to borrow money to help offset some of their risk. That’s just simple economics.
Good News, You’re Rebuilding Your Credit Rating
If you’ve been making your car payments on time for the past year or two, you probably not only improved your credit rating, you’ve demonstrated that you can be counted on to make your payments on time. There are loan companies that are more than willing to buy out your existing loan and lend you money – often at prime or near prime rates. Over the life of a typical car loan, that can save you hundreds or even thousands of dollars, depending on the size of your loan. Not only that, refinancing could also allow you to reduce the size of your monthly payments, leaving you more money to spend on important things like food and shelter. It can also make it possible for you to pay off your car loan much sooner.
Refinance Sooner Rather Than Later
If you refinance and can afford to continue to make the same loan payment every month, you’ll be able to pay off your loan a lot quicker. If you’re finding it hard to make your monthly payments now, refinancing could allow you to stretch your loan out over a longer term, reducing the monthly payment (just don’t turn a four year loan into a nine year loan).
The best time to refinance is near the beginning of your loan. That’s because the interest is front loaded which means that you are paying more interest at the beginning of the loan. That’s when reducing the interest rate has the greatest impact. So, if you bought your car in the last year or two, now could be the ideal time to refinance.
Get into a Lower Interest Loan in Just Minutes
If you have a high interest car loan but have been making regular payments, Auto Loan Kelowna wants to reward you. With our new auto loan refinance program, you could be paying a prime or near prime interest rate for your car loan, and it only takes a minute or two to apply. What have you got to lose, besides a lot of interest charges?
Contact us to apply!