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Is Refinancing an Auto Loan a Good Choice?

September 16, 2022

Here Are Some Quick Determining Factors To See If Refinancing Makes Sense For You

Refinancing an auto loan could be a smart move if decreasing the interest rate on the loan will save a reasonable amount of money either by decreasing your monthly payment or shortening the term. Both are effective ways to cut down on the interest you will pay during the life of the loan.

Smiling happy young woman giving her friend a lift in her car in town.

How do you know when it’s a good time to Refinance?

You should refinance a car when it could help you save money, get you a lower payment, or both. You should probably skip refinancing if you’re behind on your current loan or your current loan has prepayment penalties.

Use these 5 points to help determine if refinancing may be right for you:

  • Your credit has improved since you were approved for the loan. This may entitle you to a better rate.

  • You want to change the loan term. This may lower your payments and/or cut down on the total interest owed.

  • Auto Loan Rates are down, and you’d like to take advantage. This may also allow for a better rate.

  • You have positive equity. In this situation, you may want to consider a trade-in versus a refinance. It’s good to look at the options.

  • You dislike your current lender. Switching lenders may offer a multitude of ways to save. Especially if you go through a bigger picture debt-consolidation plan.

Start by plugging in some numbers in the auto refinance calculator below to estimate your savings and decide if it makes good financial sense to refinance. You can find and compare First Source’s auto rates here to help with your calculations.

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If you’re unsure if refinancing your auto loan is the right move, you can schedule an appointment with one of our friendly Financial Service Representatives, or you can call us at 315-735-8571 to compare rates and terms.

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