Here’s the short version.
To save money.
To balance your budget.
To get out of a bad deal or loan that no longer works for you.
Have you considered refinancing your SUV loan?
Since most dealerships markup rates, millions of American drivers are paying more monthly than they need to be on your auto loan. Whether your monthly budget is tight, you want to change the terms of your loan, or you just want the better rate you deserve, refinancing is the best way to get a better deal on your vehicle loan.
Nope! Refinancing is quick and simple, especially when you work with our refinance experts at Auto Approve. We’ll connect you with our network of 50+ trusted lenders, help you understand your options to find the right refinance for you, then do the paperwork for you — with no markups to your rate.
Read on to read more about the how and why of refinancing.
Drivers who refinance with Auto Approve save an average of $135-$500 per month.
For the vast majority of drivers, saving money is the ultimate goal of refinancing. By finding a lower car loan APR, you can drastically reduce the interest that you will have to pay over the life of the loan.
Car loans are front-loaded amortized loans. This means that, in the beginning of your repayment, you are primarily paying back the interest, and as time goes on you gradually pay more towards the principal and less towards the interest. So the earlier you refinance your SUV loan, the more you save overall.
Finding a lower car loan APR depends on two key factors: market rates and your finances.
The interest rate that you are offered will depend in part on the prevailing market rates. If market rates are lower now than they were when you originally financed your SUV, you will most likely be able to secure a lower car loan APR.
If your credit score has increased since your initial financing, you will most likely be able to secure a lower car loan APR if you refinance.
You may also be able to get a better rate if your credit score is the same but other factors have changed, like your income or debt-to-income ratio. However, your credit score is the most important factor lenders look at when deciding what interest rate is appropriate.
Your credit score is based on:
Payment history (35%)
Amounts owed (30%)
Length of credit history (15%)
Credit mix (10%)
New credit (10%)
Your payment history and amounts owed make up the largest portion of your credit score.
Making full, consistent, on-time payments and reducing the amount of overall debt you owe will make the biggest difference on your credit score. If you have been paying down your debts and consistently paying your bills, there is a good chance that your credit score has increased and you can secure a lower car loan APR.
By refinancing your SUV, you can loosen up your monthly budget significantly. Your monthly vehicle payment can be reduced by lowering your auto loan APR, lengthening your repayment period, or both.
Reducing your car loan APR will automatically reduce the amount of your monthly car payment.
Let’s say you buy a $25,000 car with a $5,000 down payment. You finance the remaining $20,000 with a 7% loan over 48 months. Your monthly payments will be around $480. But let’s say you now refinance your loan to a 3.5% APR. Now your monthly payments are down to around $445. That little extra might make all the difference in your monthly budget. Over the course of four years, that’s a savings of over $1,000.
Lengthening your repayment period will also change your monthly payments significantly. Let’s look at that same $20,000 loan at 7% over 48 months. Changing your repayment period to 60 months will change your monthly payments from around $480 to around $400. That is a huge monthly savings (although keep in mind that you will be paying more interest over the life of the loan due to the extended repayment).
If a little extra breathing room would help you with your monthly budget, refinancing your SUV is a great way to save some extra money.
It’s all too common for people to get roped into bad financing deals due to dealership markups.
A lot of the time it’s all down to a smooth talking salesman and a moment of weakness. If you were a little underprepared when you went to look at a new SUV, you may have been blindsided and agreed to something that was less than ideal.
Here are a few reasons that a loan might be considered unfavorable:
Car dealerships have notoriously high APRs. This is because they merely act as middlemen in your loan transaction with the lender. They simply markup the rates and fees that the lender offers. You should always avoid financing through dealerships–it’s much better to get a loan through Auto Approve. Unlike dealerships, Auto Approve never marks up their prices–ever. They compare different lenders and offers and pass the savings right on to you.
Bad customer service can be a serious issue when it comes to financing. Not only is it downright frustrating to not be able to communicate when you need it, but it can cost you money.
According to Consumer Financial Protection Bureau, these are the major complaints with lenders:
Communication issues about forbearance (a temporary pause in payments)
Repayment options regarding forbearance
Delays from lender with regard to loan modification
Overcollection of funds for taxes and insurance
Confusion with account notices
Putting overpayments into an unallocated fund rather than applying them to the loan’s principal
These issues with lenders can add up and cost you money in the long run. So if you are in a bad relationship, you want to get out of it immediately. Refinancing your loan is a great way to do that.
While a longer repayment period will reduce your monthly loan payments, it will cost you more in the long run. If you are able to refinance your loan for a shorter period, you can save a lot of money.
If your credit was not great, you may have needed a cosigner to get approved for your current loan. The only way to remove a cosigner is to refinance your loan. So if you are looking to take sole ownership of your loan, refinancing is the way to go.
There are a lot of great reasons to refinance your SUV.
From saving money to saving yourself from frustration, refinance can make your financial life much easier. If refinance sounds like a good option for you, getting started is easy: just get in touch with Auto Approve today! Our experts can answer any questions and help you start saving money now.
Don’t wait to start saving – get your free quote.
