When assessing your budget, refinancing your auto loan may better your financial situation more than you think.  From monthly savings to substantial savings over the life of the loan, refinancing could help you reach your financial goals more quickly.  However, there may be scenarios that you may want to put off refinancing your vehicle.  Let's explore when is a good time and when you should wait.


  • You Can Lower Your Interest Rate and Reduce Payments
    Did you purchase your vehicle when rates were high, when your credit wasn’t in the best shape, or you needed a co-signer?  Now might be a good time to see if you qualify to lower your interest rate with a refinance.  Lower interest rates can lead to significant savings over the life of the loan and often reduce your monthly payments.
  • Your Credit Score Has Improved
    Making timely payments on your refinanced auto loan can positively impact your credit score. A higher credit score opens the door to better financing opportunities in the future for other purchases, such as a home. Refinancing your auto loan is not only about the immediate benefits but also about building a stronger financial foundation.
  • You Need to Change Loan Terms
    When refinancing, you have the option to negotiate new loan terms.  You could choose to extend the loan term and reduce payments further or take the extra savings and pay off your vehicle faster.  This flexibility can help you reach your financial goals faster.


Wait to Refinance:

  • You Have Negative Equity
    There are many websites you can use to find out the value of your vehicle.  You will look at your vehicle’s worth compared to what you still owe.  If the value is more than you owe, you have positive equity.  If the vehicle is worth less than what you owe, you are in a negative equity situation.
  • Lower Credit Score
    If your credit score has dropped or not improved since you initially financed your vehicle, you might not qualify for a better rate.  Use services such as a Credit Builder Loan and ensure you are making your payments on time to improve your score before refinancing your loan.
  • Nearing the End of Your Loan
    The larger portion of interest is typically paid at the beginning of your loan.  The savings may be very limited when you are close to the end of your loan and could potentially extend your period of debt outweighing the monthly savings.


Deciding to refinance requires careful consideration and our Tyndall Team is happy to help you make the decision that best aligns with your financial goals.


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