TIPS FOR REFINANCING
If you are currently making high monthly payments for your vehicle loan, then it’s about time to consider refinancing your loan. Okanagan Drives Credit offers refinancing options for those individuals and companies that want to lower their monthly payments. But when is it a good time to consider refinancing options? You know you are making a good decision to refinance your loan if your credit score has improved by at least 50 points since you first financed your the purchase of your vehicle, or if you have the possibility to obtain a new loan that is even one 1% lower that your current loan.
WHEN REFINANCING MAKES SENSE
From a financial perspective, refinancing your vehicle loan has many advantages, it can help you make huge savings. For instance, let’s say you have a six-year loan for a total of $35,000 with an interest rate of 8.5%. And let’s also assume that you have been making your all faithfully for the last two years (which leaves you with four more years to go). Now that you are about to start your third year, let’s say you still have a little over $29,000 remaining to pay off. If you refinance the last four years at a lower interest rate of 5.5% instead (3% lower that your current interest rate), you would reduce your monthly payments by $35 and also save a total of $1,680 by the end of the loan. This is when refinancing makes sense!
THE REFINANCING PROCESS
The refinancing process is very similar to the financing process you had to go through the very first time. So you will have to provide the same documents you provided the first time. And there is no need to worry, once you submit your credit application, Okanagan Drives Credit will take care of the entire process from start to finish, reviewing and executing all the new loan papers.
Here is another tip, if you want to reduce the duration of your payment term, all you need to do is keep paying the same amount as your current monthly payment at a lower interest rate. And you will be done paying for your vehicle in no time. With this approach, you are able to shorten your payment term and also reduce the total money you spend on interest. All you really need to do is let us know what you want to achieve during the refinancing process and we will work to find the rate and term that best suit your needs and budget.