SCU Credit Union Go to main content

Perspectives, Financial and Otherwise,
from SCU Credit Union

Facebook Twitter Print

Lower Payments or a Shorter Term - Why You May Want to Refinance Your Car


Refinancing your car loan can often be a smart financial move, potentially saving you money.
Here's why you should consider it:
Save Now button being pushed

  • Lower Interest Rates: If interest rates have dropped since you first took out your car loan, or if your credit score has improved, refinancing could secure you a lower rate, substantially reducing the amount of interest you'll pay over the life of the loan.

  • Reduce Monthly Payments: By securing a lower interest rate or extending the loan term, you could reduce your monthly payments, freeing up cash for other expenses or savings.

  • Pay Off Your Loan Sooner: If you're able to secure a lower interest rate without extending your loan term, you can pay off your loan faster, which means owning your car outright sooner.

Whether your credit score has improved, interest rates have shifted, or you've found yourself in need of a lower monthly payment. How do you refinance your car loan? Here's a checklist to help with the process:

  1. Review Your Current Loan: Determine your current rate, monthly payment, and remaining balance.

  2. Check Your Credit Report: Your credit score heavily influences your refinancing rates, so ensure your credit is in good standing and report any inaccuracies.

  3. Calculate Potential Savings: Use auto refinance calculators available online to determine if refinancing will lower your costs.

  4. Gather Necessary Documents: Have your driver's license, vehicle registration, proof of income, and your current loan documents handy.

  5. Shop for Rates: Don't settle for the first offer. Compare rates from multiple lenders, including credit unions like ours, where rates may be more competitive.

  6. Consider the Loan Term: Decide if a longer term for lower payments or a shorter term to pay off your loan quickly suits your budget and financial goals.

  7. Apply for Refinancing: Once you've chosen a lender, complete their application process and provide all required documentation.

  8. Evaluate the Offer: Review the terms of your new loan offer, including the APR, monthly payment, and any fees.

  9. Complete the Loan: If everything aligns with your financial objectives, finalize the paperwork to start saving.

Remember, refinancing isn't a step to be taken lightly, but with the right preparation and understanding, it can be a powerful tool in managing your finances.

Consider SCU for your auto loan refinance, you may be able to lower your car payment or gain cash for other bills. For advice and help through the process, stop in at one of our branch locations or reach out to our member service call center at 781-784-7725 or toll free at 1-877-661-3300.



« Return to "Blog Home"