With interest rates going up and down over the past couple of years, people may not be sure whether they have the best loans rates available.
For some, a refinance at today's rates could be just what they need to pay debt off faster.
Jeannine Lynch, VP of Consumer Lending at Mountain America Credit Union, joined us with why auto loans are especially good to look at right now.
She says auto loan rates have come down a bit in the past year, so you could see some savings by refinancing even a more recent purchase, but you also could find that refinancing an older loan could help you pay off other high interest debt, too.
Jeannine explains, "If you have a 60-month auto loan you've been paying for three years, you might have equity in your vehicle. For example, if your vehicle is worth $18,000 and you owe $4,000, you have equity. If you also have a $4,000 credit card balance at 23% interest, refinancing your auto loan to combine these debts could save you money."
A financial institution can pay off your remaining $4,000 vehicle loan and your $4,000 credit card balance, then write a new $8,000 auto loan. You'd make your new monthly payment at a lower interest rate.
So, instead of paying interest on a credit card and an auto loan, they're just paying auto loan interest on the newly refined loan.
To see if this option makes sense for your situation, come into any Mountain America branch and ask them to run a Debt Rescue analysis for you. They can show you what you qualify for and how much you might save with a refinance.
If you are looking to buy a new or used vehicle, the smartest thing you can do is to know who much you can afford. Get pre-approved for your auto loan through your credit union or bank.
With a preapproval in hand, you'll also have better negotiating power at the dealership, and the buying process will be streamlined because the loan approval is already in place.
You can learn more at macu.com.
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