When is The Best Time to Refinance a Car Loan?

When is The Best Time to Refinance a Car Loan?

Posted on May 3, 2022

Have you had your car loan for a while? Fancy a change? Looking to make changes to your finances and want to know if now is a good time? You’re not alone. Our Brantford car loan team spend a lot of their time helping Canadians refinance their loans.

We could help you too.

But when is a good time to refinance a car loan in Brantford?

Like most things to do with finance, it depends entirely on your personal situation. With that in mind, we’ll outline some scenarios when refinancing may be a good option.

You need to lower your monthly payments

If you’re having issues making your car loan payments, refinancing can help. It’s a viable way to lower the loan amount and the monthly payment, which can be enough to remedy the situation.

Much depends on your credit score and how much of the loan you have already paid off. Unless you have come into money, it isn’t usually worth refinancing a newer car loan as you won’t save much money.

If you’re over 18 months into your loan, it may become worth it. Much will depend on the outstanding amount, the equity you have and how urgently you need to refinance.

You now qualify for standard car loans

If you got a bad credit car loan in Brantford and have now improved your credit score enough to qualify for a standard loan, it may be a good time to refinance. You’ll have to do the math though.

A standard loan will have a lower rate, which can save you over the term. But if your current loan is relatively new, it may have early repayment penalties. You’ll have to check your paperwork to find out.

You have significant equity in the car

If you have passed the negative equity stage of the Brantford car loan and are now paying off the car with equity to spare, now may be a good time to refinance.

Again, much will depend on the age of the loan, the outstanding amount and your credit score.

You can afford to pay more each month

If you just got a promotion or a raise and want to use the money to pay down debt, that’s often a good time to refinance a car loan. If you can pay off significantly more each month, you should certainly consider refinancing.

You could go for a shorter loan and pay it off faster, thereby paying less interest.

How to refinance a car loan in Brantford

Refinancing a car loan is a very straightforward process. All you’re doing is applying for a new loan to replace the old one. Hopefully on more preferable terms.

You’ll need a settlement figure from your current lender, your credit score, your current loan paperwork to make sure you’re not liable for early settlement fees and all the supporting paperwork for the new loan.

Aside from that, it’s a very straightforward process and one we would be only to happy to help you with!

When you’re ready for a car loan, get in touch with the Stoney Creek auto loan experts at Northway Ford for great deals on auto finance.

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