When Refinancing Makes Sense
Refinance When Interest Rates Have Dropped
Monthly payments on large loan amounts, like mortgages upwards of $300,000 can be significantly reduced from as little as a half point reduction in rates.Smaller loans like an auto loan will need only see substantial benefits from a reduction of 2 points or more. A rate calculator is a valuable tool that will help you see what you can expect to save from reducing your loan rate. Rates don’t change dramatically by themselves too often so check going interest rates regularly to see if rates have changed.
Refinance When Your Credit Score Has Improved
Very frequently customers get a loan when they are starting with no credit or have some dings on their credit history so they get loans with higher interest rates. If you have paid all your loans on time for at least six months and/or you have removed negative items from your credit history then it is worth checking with lenders if you now qualify for a refinance loan at a lower rate.
Refinance if You Got an Unfair Interest Rate
Perfect credit scores and keen negotiating skills does not mean that you get the lowest rate possible on your loan. If a bad deal got by you or you feel you did not get the best rate possible go ahead and shop around. There are many lenders that are eager to work with you to get your business.
Refinance to Get Through a Financial Setback
Financial hardship is often unexpected and makes tough decisions a necessity. Refinancing makes it possible to reduce your monthly payments not only through lower rates but also by extending the term of the loan. The money you save can be exactly what is needed to get through those tough times.
Lastly, find the right lender to work with. Lenders such as AUTOPAY andStudent Loan Herospecialize in loan refinancing. They offer tools, information and services that save you time and money.