If you want to lower your monthly payment, get a better interest rate, or adjust the length of your loan, auto loan refinancing can be a great option. However, it works best if you’ve improved your credit history since your original application. There are a few other caveats attached, too, so talk to our team at Hall Ford Elizabeth City if you’re in these situations.
Should I Refinance My Loan?
Have you built your credit history since you applied for your car loan? Refinancing lets you apply for a new loan with better terms, then use the principal to pay off your original loan. If loan offers in general are better right now, like nationally low interest rates, or if you have paid off more than half of your car and have positive equity, this is an especially good way to save.
When Is Refinancing a Bad Idea?
If depreciation has left you upside-down on your loan—that is, owing more on the loan than the car is currently worth—refinancing will leave you with a bigger bill. Make sure to account for any additional costs, like early termination fees on your original loan, before you make a decision. Even if you snag marginally lower interest rates, you may end up spending more.
Alternatives to Refinancing
Contact your current financier and see if you can modify your existing loan. If you’ve kept up with your payments, they may be open to loan modification to adjust the terms for your finances. Otherwise, it may be time to trade your model in for something more affordable.
Refinance Your Ford Loan in Elizabeth City, NC
Find out if refinancing will help you fit your loan to your budget better at our Elizabeth City Ford dealership! Stop by and talk to our finance team to run the numbers in person. While you’re here, explore our showroom and learn more about our Ford financing plans, then apply for a new loan today!