How Come I Should Refinance My Car at a Credit Union?

Are you drowning in high payments for a car loan with a high interest rate that you can’t possibly afford? Were you one of the car buyers who smelled the new interior, marveled at all the gadgets, took a test drive, and then just wanted to get behind the wheel of their new car, regardless of the price or the finance rate? Like many others in your position, after the initial excitement subsided, you realized the interest rate was higher than you anticipated, and it is now putting pressure on your budget.

Consider refinancing your car. If you are eligible for a lower rate, refinancing might save you money. Additionally, you might get better repayment terms and unquestionably more individualized customer service at a credit union.

How Do Refinancings Operate?

Although much easier, the procedure is comparable to refinancing your home. Similar to a home refinance, you use a loan from another lender to settle an existing loan at a much lower interest rate. To get a better deal, you should refinance. With a longer term, you might be able to pay off the debt more easily on your budget while a lower interest rate could save you hundreds of dollars.

What Situations Justify Refinancing Your Car?

• if you weren’t able to initially secure the best interest rate possible. Maybe you were in a rush to buy your car and didn’t shop around for the best rates with nearby lenders. Particularly credit unions are renowned for providing their members with favorable interest rates on auto loans.
• If you have high interest loans because of your poor credit, lack of credit history, or unemployment, you might benefit from an auto refinance. It’s worth checking to see if there’s a better rate available this time around, provided you haven’t missed any payments.
• Refinancing your car may make sense if your financial situation has changed since you first applied for the loan. A reduction in interest rates may be yours if your credit score has increased, even if only by 50 points.
• Perhaps you found a mistake on your credit report that prevented you from getting a better rate. If that error has been fixed, now might be a good time to refinance your car. On AnnualCreditReport, you can look for errors in credit reports.
• Refinancing into a new loan with a longer term might not be beneficial if you only have one or two years left on your current car loan. However, a refinance might be the best option if your goal is to lower your monthly payments.

Why Refinance With A Credit Union?

• Since credit unions are not-for-profit organizations, they operate solely for the benefit of their members and frequently provide special loan programs that might not be offered by a conventional bank.
• Lower Interest Rates: Credit unions pass along their profits to their members in the form of lower rates and charges. The National Credit Union Administration estimates that the average car loan from a credit union was 2.61% less expensive than the average loan from a bank.
• Flexible terms for repayment: There are numerous repayment options and many credit unions that offer financing up to 100% of the value of the vehicle.
• Items for Loan Protection: Usually, the auto dealer is where you can purchase GAP insurance. Most of the time, you can save hundreds of dollars for this valuable protection if you buy that insurance from your credit union.
• In the event of a financial emergency, credit unions permit their members to occasionally forgo making a loan payment. You shouldn’t expect that kind of special treatment if you ask a car dealer.

What could be better than a lower interest rate and monthly car payment?

You have nothing to lose by trying to get a better deal because the auto refinancing application only takes a few minutes to complete and the entire process isn’t taxing. Therefore, it might make sense to refinance your loan with your local credit union if you love your car but hate your loan.