When to Refinance:
If you’re feeling stuck in your car loan, it could be for a variety of reasons and we're here to help! Before refinancing your car loan, it’s important to make sure that it will be beneficial for you. There are several factors that can make or break your decision, so now is the time to review and compare to see if refinancing can save you money or improve your terms. Here are some of the reasons that you may want to refinance:
Your Credit Score Has Improved
A credit report is a central part of the loan process. Your credit score will help determine your interest rate, terms, and even possible fees. If your credit wasn’t as strong when you originally purchased your vehicle, refinancing after steady repayment can greatly improve your loan terms.
Changing Your Monthly Payment
It’s possible that your financial situation has changed since you bought your car, hopefully for the better. Whether you’re looking to refinance to a longer term, lower your payment or want to increase your payment to pay off the loan quicker, refinancing can help you find the monthly payment option that works for you.
Interest Rates Have Improved
The loan interest rates being offered fluctuate over time with the market. If interest rates have gotten better since you got your loan, you could save money on your monthly payment or over the length of your loan.
For a more in-depth information about whether refinancing is a good idea for you, check out this guide.
Related: When Should I Refinance My Car?
How to Refinance:
So how do you start the process of refinancing your loan? It’s a similar process to your original loan, only this time your lender will pay off your current loan and begin a new loan for you. Here's the information you'll need about how to refinance your car loan:
Documents and Loan Information
The first thing to do before moving forward is to review your current loan. It’s important to know what interest rate you’re paying, your monthly payment and loan balance, and the amount of time left on your loan. Being aware of your current loan and financial situation will help you make decisions when applying for and evaluating your refinance options.
There are also several documents and some information that you will need to have prepared ahead of applying for a loan. These include:
- Your driver’s license
- Proof of employment, such as recent paystubs from your employer
- Your Social Security number
- The VIN (vehicle identification number) of your car
Apply
Once you’ve reviewed your current loan and prepared your documents, it’s time to fill out the application for your loan. The application process is a great way to determine how much a refinance can benefit you, and it’s done at no cost to you. Our specialists at Wasatch Peaks are happy to help you through this process. To apply, please visit your local branch or fill out our online application.
Compare and Evaluate Terms
Now that you’ve completed your application, you can compare your current loan with your refinance options. Your loan specialist can review the available options with you, including different loan lengths, your interest rate, and what your payment will be with those options. This can help you find a term that fits what you're looking for.
Wasatch Peaks offers auto loan calculators that can also help you anticipate the monthly payment and savings from the new loan. You can check out those calculators here.
Complete and Sign
If you have decided to refinance your loan, you can now complete the loan paperwork and sign the new loan documents. Your lender will pay off your old loan and you’ll then begin making payments on the new refinanced loan, with a new interest rate and term length!
While it may have seemed initially overwhelming, refinancing your car loan is simple and easy - especially with our specialists to help you through the process!
