BMI Federal Credit Union
Refinancing Your Auto Loan
When, Why, and How
Is an auto refinance right for you? Refinancing your loan can often save you 10-20% on your monthly payments, but is there ever a better time to refinance? At BMI Federal Credit Union, we are here to help answer that question and more. Check out our four best reasons to consider an auto-refi...
1. Drop in Interest Rates
A drop in the interest rates is the first sign that you could save money. Refinancing to a lower interest rate can reduce your monthly payment. Do you know your rate? Compare it to current auto loan rates.
2. A Positive Change to Your Credit Score
Your credit score is an important determining factor for your loan rate. If you notice an increase in your score, you may qualify for a lower loan rate, even if the overall interest rates have not dropped. Check your credit score a few times a year. If your number is going up, then it’s a good time to look into refinancing your loans.
3. Financial Troubles
If you found yourself in a tight financial situation, it may also be a good time to look into refinancing your auto loans. We like to mention that BMI Federal Credit Union has no application fee, which means you can take a peek at what your payments could look like if you refinance. We're also happy to work with you and make sure you're taken care of.
4. A Change in Personal Status
In addition to saving money, you may have the option to change the status of owning your loan. In other words, you can refinance to remove any original co-signers from your loan, and have the entire loan in your name.
Is Refinancing Always a Good Idea?
If you experience any of the above changes, refinancing is a great financial move, but there are a few caveats to consider. Review your current loan documents and look for a pre-payment penalty or an early termination fee - that is, a fee imposed if you break up with your current financier. We don't think this is a refinancing deal-breaker, but it's an important step in the decision-making process.