Refinancing can mean valuable savings for the life of your car loan
Did you know you can refinance a vehicle loan? Often, when you finance a vehicle, you simply “set it and forget it”—you make your monthly payments for four years, six years, then you own the car outright.
However, with the right circumstances, refinancing an auto loan can result in significant savings or relief. Rates change and your financial situation can improve. Suddenly, you might be able to lower your rate and reduce your term, which would mean more going toward your principal balance, and your loan gets paid off earlier. Or you could reduce your monthly payment with a better rate and either keep your loan term or extend it—and enjoy savings by virtue of having more money in your pocket each month.
Refinancing an auto loan could lead to lasting benefits. Contacting SELCO is a great first step.
“My hope is that all of our members call us at least once per year,” said Michael Sauley, Vice President of Consumer Lending and Senior Consumer Credit Officer at SELCO. “Sometimes our members aren’t aware of the savings we can offer, especially on a debt like an auto loan. Not only can we help members understand their loan better, but we can also search for savings that typically wouldn’t come to mind.”
Below are some of the most common reasons to refinance an auto loan. If any strikes a chord, the time may be now to explore your options.
Excellent credit, excellent rate
One of the biggest factors in determining your auto loan status is your credit score. The higher the score, the lower the interest rate. A score above 760 will likely ensure you get the lowest possible rate. Regardless of whether you want to pay off your loan quicker or extend it to lower the payments, a good credit score will work in your favor. Access your credit score for free to see if you are a candidate for an excellent rate.
Interest rates have dropped
If the market interest rates are lower than when you took out your auto loan, refinancing could reduce the total amount you pay in interest over the life of the loan. For example, in June 2024, rates peaked at 7.91% but have been on a downward trend since. Check out SELCO’s auto loans page to see our current rates—even a small difference in your loan rate can lead to substantial savings.
You want to pay off your loan sooner
If you’re in a stronger financial position and want to be debt-free, refinancing to a shorter loan term can help you achieve that goal. While this could potentially raise your monthly payment, you’ll pay less in interest and own your vehicle outright sooner.
Refinancing an auto loan is all about finding balance between your immediate needs and long-term financial health. Have a loan at a different financial institution? For a limited time, you can enjoy additional savings by taking advantage of our auto refinancing promotion. To see if refinancing is right for you, start a live chat, call us at 800-445-4483, or visit your local branch.
