Benchmark FCU: Is It Ever Smart to Refinance a Car Loan?

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Image via Benchmark Federal Credit Union.
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Growing up, your parents may have told you to pay cash for a car. But with auto loans at such incredibly low interest rates right now, it’s smart to finance this way – and refinance your current vehicle. Especially when it frees up cash for your emergency fund in these uncertain times.

As we all know, the interest you pay on an auto loan can be very costly depending on the interest rate. You may have also found that dealer financing does not always get you the best rate. When looking to lower your interest rate, it’s important to shop around and include your local credit union in your search. Keep in mind that the interest rate that you qualify for today can be significantly lower than your current rate, leading to big savings. You may also be able to reduce your loan term to save even more.

When searching for a low interest rate for auto loan refinancing, be sure to look at Benchmark FCU. During the month of February, the credit union is in the midst of an Auto Loan Flash Sale that features a 0.99% APR for up to 60 months. This offer is good for financing or refinancing your vehicle from a dealer or another financial institution with Benchmark FCU.

4 Steps to Auto Loan Refinancing

1. Shop lenders for a better rate or overall auto loan deal.

2. Use an auto loan calculator to compare rates and see the savings. Be sure to take into consideration any fees or hidden costs, as well as prepayment fees. Determine the term that best fits your needs and budget. Here’s one example of an auto loan comparison:

Loan Amt.       APR                 Term               Payment          Total Interest

$35,000           5%                   60 mths.          $660.49           $4,629.59

$35,000           0.99%              60 mths.          $598.13           $887.83

3. Collect your necessary documentation and information. This includes current loan information, including the payoff amount. You will also need to gather your personal information and identification, as well as proof of income. Finally, you will need your vehicle information, including the vehicle identification number (VIN) and proof of insurance.

4. Apply for auto loan refinancing. Many lenders, including Benchmark FCU, will allow you to conveniently apply online at BenchmarkFCU.org.

Refinancing may be a great way to find an auto loan that better meets your needs. By taking the time to do your research, you might find a better rate and term to fit your budget and save you interest over the life of your loan. It may also help you pay down your debt faster.

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Rebecca Worthington is the Vice President of Community Relations at Benchmark Federal Credit Union. The only federal credit union to exclusively serve Chester County, Benchmark FCU has been serving the community for more than 80 years and is known for extraordinary services to its members. For more information on credit union eligibility and protecting your financial well-being, visit BenchmarkFCU.org.

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