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Car Loan Refinancing in Georgetown Pros & Cons

Car Loan Refinancing in Georgetown Pros & Cons

car loan refinancing in Georgetown may seem appealing if you think you can get a lower rate or you need some money but it isn’t for everyone. Like any financial decision, careful thought needs to be given to what comes next.


Our Georgetown car loan team outlines the pros and cons of refinancing an auto loan to give you a better idea of whether it’s a good idea or not.


They can also help arrange one if you want to go ahead.


Pros of car loan refinancing in Georgetown


There are definite upsides to refinancing a car loan.


Reduce the interest rate – If headline rates have fallen or you now qualify for a standard car loan instead of a bad credit car loan, refinancing can save a lot of money in interest.


Raise some cash – Whether you want to consolidate other loans or free up some money for another reason, refinancing is one way to do it. As long as you have a good credit score and sufficient equity in the car that is.


Lower your monthly payment – You can either refinance for a lower amount using the equity you build up or extend the term to lower payments. Both will work for different situations.


Cons of car loan refinancing in Georgetown


There are also downsides to financing a car loan.


Pay more interest over the term – If you refinance over a longer term to lower payments, you’ll be paying more interest over the term. Sometimes, substantially more.


Loan fees – Most car loans we work with don’t include high fees but some will. Some loans will also come with early settlement fees. All of which can add up and is money you won’t get back.


Higher interest rates – Sometimes, borrowing less can cost you more in interest. Lenders tend to offer lower rates for higher amounts because they end up making more overall. Shorter loans or lower amounts often means higher rates so the lender makes their profit.


Refinancing a car loan in Georgetown


Refinancing is a popular way of changing your current loan to something that fits your current situation better. It’s also a way to lower the monthly cost or the interest you’re paying.


It isn’t for everyone though. We wouldn’t recommend refinancing for someone less than a year into a loan or someone with poor credit.


We won’t tell you no though, we can still get you that loan but we just wouldn’t recommend it.


On the other hand, if you got a bad credit car loan and have now improved your credit score enough to qualify for a standard loan, refinancing makes perfect sense. You could save hundreds, or even thousands of dollars in interest over the term depending on your situation.


That is well worth doing!


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


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