Does It Make Sense to Refinance My Car Loan?
If you’re struggling to pay your bills each month, you may be looking for ways to infuse cash into your budget. Often, refinancing your car loan can provide the financial relief you need to afford your monthly expenses. However, before moving forward with refinancing, it’s important to determine whether it makes sense in your specific situation.
In most instances, refinancing your car loan can provide significant monthly savings, making it a smart decision. However, you should always crunch the numbers first to figure out what loan terms you need to achieve to benefit from the process. We recommend using our car refinance calculator to get a better sense of how much you’ll potentially be able to save.
While the decision must be based on the specifics of your situation, it generally makes sense to refinance your car loan in the following scenarios.
You’re Having Trouble Making Your Car Payments
If you’re having trouble making your monthly car loan payments, it generally makes sense to refinance. Failure to make your monthly car payments on time can result in a variety of negative consequences:
- You’ll incur late fees and additional interest
- Your credit score will decrease, making it harder to secure favorable loan terms in the future
- Your car may be repossessed (if payments aren’t made over an extended period of time)
One of the greatest benefits of refinancing your car loan is that you can lower your monthly payment. This can occur in several ways:
- You can lower your interest rate, which will lower your monthly payment over the same loan term
- You can extend your loan term to lower your monthly payment (this may result in paying more money over the lifetime of your loan due to additional interest accruing)
For many people, lowering your monthly payment will turn a burdensome car loan into an expense that you can now manage. In this situation, refinancing will usually make sense.
You Want to Save Money on Your Car Loan
There are several situations which may allow you to lower your interest rate:
- Your credit score has improved
- Interest rates have gone down since you purchased your car
- You’ve improved your debt-to-income ratio
At iLending, we’re often able to help our clients achieve significantly lower interest rates when they refinance with us. Through the start of 2023, we’ve been able to secure an average interest rate reduction of 5.16% for our clients. This can result in saving thousands of dollars in interest over the lifetime of your loan.
The Money You’re Spending on Your Car Loan Can Be Put to Better Use
Even if you’re able to afford your monthly car payments, it may not always be the best use of your money. On average, iLending is able to save our clients $143 a month when they refinance with us. That monthly savings can be applied in a lot of ways that will improve your overall finances:
- You can pay down higher interest debts, such as credit cards
- You can pay for home improvements
- You can add to your savings or retirement accounts
- You can save for a much needed vacation
The ways to make use of the savings you can unlock when you refinance your car loan are virtually limitless. We encourage you to read our savings stories to see how other iLending clients have put this savings to good use. If you feel like lower monthly payments would help you manage your money better, refinancing may make a lot of sense.
iLending Makes Car Loan Refinance Easy and Hassle Free
In general, refinancing a car loan makes sense for just about anyone who would like to save money on their loan, lower their monthly payments, and infuse additional cash into their budget. At iLending, our You First Approach™ makes car loan refinance easy and hassle free.
With our unique approach, you’re paired with a loan consultant who will take the time to understand your goals for the refinance process. Then, your loan consultant will leverage our extensive network of over 50 nationwide lenders to identify the best loan options for your needs. The best solutions will be reviewed with you in detail, and you’ll have an opportunity to ask your loan consultant any questions that will help you to better understand your options.
After this conversation, your loan consultant will recommend the best loan for your specific needs. Once you pick a loan, we’ll handle all the work for you. We’ll fill out all the paperwork and follow up with your existing lender to make sure your current loan is paid off properly. You can relax knowing that every step of the process is being handled correctly.
On average, iLending customers save $143 per month when they refinance with us. For many people, this level of savings makes car loan refinance an easy decision.
Apply now to get the car loan refinance process started.
What would you do with an extra $132* in your pocket?
