A number of consumers have found a way to drive the car they want and have more money in their pocket. They're doing this by refinancing their auto loans. The good news is that even though interest rates are likely to move higher, you may still be able to benefit from refinancing.
According to Brian Regan, chief consumer officer of LendingTree, Inc., "Many people finance their auto loans directly through their dealer, which is convenient, but what consumers don't realize is that they don't always get the lowest rate they qualify for from the dealer, which could cost them more money over the life of their loan."
How much can the process save you? By refinancing a $28,000 auto loan from an 8.5 percent interest rate to a five percent rate, over 60 months, you could save $46 a month, which adds up to $552 a year, or $2,760 saved over the life of the loan.
To decide if this might work for you, consider both your interest rate and the length of your loan. To reduce the amount you pay over the life of the loan, refinance your loan at a lower rate for the same or a reduced term. It may slightly increase your monthly payment, but if you can afford it, you can pay your loan off quicker and save more money in interest.
If you're looking for a way to keep more money in your pocket now, lower your monthly payments by refinancing your loan at a lower rate and extending the term. Just remember that doing this may increase the total interest paid over the life of your loan.
Make sure to compare a number of real loan offers and not just the interest rates before you refinance. Knowing what you're eligible for before signing on the dotted line will help you get the best deal for your wheels.
To learn more, visit the Web site at www.lendingtree.com.
Refinancing an auto loan at a lower rate and extending the term of the loan may result in more money in your pocket every month.
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