Like with other types of loans, refinancing can help you get a handle on your monthly payments. Find out more about when it’s a good idea to refinance below, then talk to our Lexus financial team at Fields Lexus of Glenview to find out more!
What Is Refinancing?
Refinancing a car loan is like exchanging one loan for another. With the money from your new loan, you pay off the remaining balance on the old loan. This means that refinancing only makes sense if the terms of your new loan are preferable to the terms of the old loan, whether that means a more favorable interest rate or a longer loan term that gives you lower monthly payments.
When Should I Refinance?
If interest rates have dropped since you bought your car, you can use an online calculator to find out if it’s worth it to refinance over the length of your loan. If you’re having trouble keeping up with your monthly payments, refinancing may give you a lower monthly payment. An improved financial situation can be a good reason to refinance, too, as you may be able to get a better deal on your loan.
When Shouldn’t I Refinance?
Refinancing isn’t a good option if you’re close to the end of your loan term. Most interest is paid at the beginning of your loan, so by the end, a change in interest rate will have less impact. You should also consider the fees of refinancing, which may outweigh the benefits of a lower payment.
Learn More about Loan Refinancing in Glenview, IL Near Chicago
If you’re struggling with your loan, refinancing can get you back on your feet. Visit Fields Lexus of Glenview and talk to our finance team about whether refinancing is a good plan for you today!
