How to Lower Your Car Payment: Insights from iLending’s President, Nick Goraczkowski
Recently, our President at iLending, Nick Goraczkowski, joined Brandon from The Debt Hotline for a live consumer-focused webinar to share practical tips on how to lower your car payment through smarter auto loan refinancing.
For many households today, the rising costs of gas, groceries, and insurance have made it harder to keep monthly budgets on track. One area where drivers often don’t realize they can save is on their auto loan.
Here are some of the key takeaways from the discussion that can help you save money and breathe easier each month.
1. Revisit Your Auto Loan. Don’t Assume You’re Stuck
Many drivers accept their original car loan as a fixed part of their budget, but that’s not always the case. If you’re paying a higher interest rate than what’s currently available, or your credit has improved since you first financed your car, you could qualify for a lower monthly payment.
Refinancing lets you replace your existing loan with a new one that often offers better terms, such as:
- A lower interest rate
- A longer repayment period to reduce monthly payments
- The option to remove or add a co-signer
- More flexible repayment features
We recommend reviewing your loan at least once a year. Small changes in your financial profile or market rates can lead to significant savings.
2. Know the Signs You Could Be Overpaying
If you’re not sure whether refinancing will help, here are a few indicators it’s worth exploring:
- Your interest rate is 7–8% or higher
- Your credit score has improved since you got the loan
- You’re struggling to keep up with your monthly car payment
- Your loan is with a lender that doesn’t offer competitive rates or good customer service
At iLending, we help drivers save an average of $148 per month when they refinance. That extra cash can go toward other bills, savings, or simply easing the monthly budget squeeze.
3. Understand the Process and Paperwork
Refinancing is often much simpler than most people expect. Here’s what you typically need to prepare:
- Basic personal information and a valid driver’s license
- Your car’s VIN, mileage, and registration
- Proof of income (like a recent pay stub)
- Proof of insurance
- Current loan statement
The application process with iLending starts with a soft credit pull, so it won’t affect your credit score. Once we identify the best loan options for your situation, you can choose the one that fits your needs.
4. Choose the Goal That Matters Most to You
When refinancing, the “right” loan is the one that aligns with your priorities. Some drivers want the lowest possible monthly payment, even if it extends the loan term. Others focus on paying off the car sooner to save on interest over time.
Think about your financial goals:
- Need breathing room in your budget? Prioritize lowering the monthly payment.
- Want to be debt-free faster? Consider a shorter loan term with a slightly higher payment.
- Looking to protect your credit health? Consistently making on-time payments after refinancing can help improve your score over time.
5. Factor in Optional Protections
Refinancing can also be a good time to review optional coverage like a GAP waiver or a vehicle service contract. These products aren’t right for everyone, but they can offer extra peace of mind, especially if you’re driving an older car or have little equity in your vehicle.
We suggest evaluating these options during refinancing to ensure your car and budget are well protected.
6. Watch Out for Common Pitfalls
While refinancing has many potential benefits, there are a few things to keep in mind:
- Check for prepayment penalties on your current loan to avoid unexpected fees.
- Be cautious about extending the loan term too long. It can reduce your monthly payment but increase the total interest you’ll pay over time.
- Make sure you compare the total cost of the new loan, not just the monthly number.
Our goal at iLending is to help you strike the right balance between short-term relief and long-term savings.
7. How Refinancing Can Impact Your Credit
A common concern is the effect on your credit score. Because we start with a soft credit inquiry, there’s no impact during the initial application. If you choose to proceed with refinancing, there will be a hard inquiry, which may lower your score by a few points temporarily.
However, by lowering your debt burden and continuing to make on-time payments, refinancing often helps improve your credit over the long run.
Final Thoughts
Lowering your car payment isn’t just about saving a few dollars, it can make a meaningful difference in your monthly budget and reduce financial stress. With the right refinancing strategy, you can often achieve better terms that align with your goals, whether that’s lower payments, faster payoff, or both.
At iLending, our mission is to empower drivers to make smarter financial decisions and save money on their car loans. You don’t have to settle for a loan that no longer works for you.
Ready to See How Much You Could Save?
Start with our free, no-obligation assessment to explore your refinancing options. You might be surprised by how much you can save each month—and what that extra room in your budget could mean for your life.
Watch the Full Webinar
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