When is the right time to refinance a car loan?
Auto refinances aren’t always a good idea unless certain variables are in play. But if you didn’t get the rate you wanted when you first purchased the car then you’re likely pretty eager to take a second look at that car interest rate. So now you’re asking yourself, when is the best time to refinance your car loan?
It can be a tricky question, but we have a couple of tell-tale scenarios in which you can make the move. So, if you find yourself in one (or more) of these scenarios, then you can safely consider auto refinancing.
Your credit score has improved
Has your credit score improved recently? If you don’t have too many negatives on your report, then your credit might be in good shape to lower your interest rate. You’ve proved yourself to be a reliable borrower, so you should be able to refinance with relative ease. If you want to improve your credit score, have a look at these credit score tips.
Interest rates are down
What do car interest rates look like when it’s time to refinance? If they’ve dropped, you should make a move on reconfiguring your loan. There are still some terms and conditions to consider on your car (which we will get into later) but if interest rates are down and you want to refinance, now is the time.
You’re ready to purchase the vehicle
You’re just about at the end of your lease and you’ve got enough money saved up to officially purchase the car as your own! Assuming you finish out the lease conditions, you should be able to make the big purchase.
Times when you should not refinance
And just to make things perfectly clear, we thought we’d share a couple of scenarios when you should hold on refinancing as well.
You haven’t been reliable with past loan payments
This is pretty straightforward – refinancing is easiest for those who have shown reliability in making their car loan payments. If you’ve been having trouble with your finances, you might need to spend some time readjusting your budget to ensure you can pay everything on time. To do this, use our car loan comparison calculator to help you compute your loan features, rates and repayments to best suit your lifestyle.
Want to make sure you have your auto refinancing is in order? Get in contact with our team and we’ll help you throughout the entire process so you can be confident you’re doing everything right.