Refinancing can be a great option for lowering the monthly payments on your auto loan. It involves getting a new auto loan to pay off your current one and then repaying the new loan with monthly payments. You are eligible for a Chase auto refinance if you obtained your current auto loan at the car dealership and have been on time with all your loan payments so far.
Can You Benefit From Refinancing Your Auto Loan?
If, like most people, you have bought your car on loan, it is likely that you got the auto loan from the dealership at the time of the purchase. The dealer may have agreed to trade in your previous car to reduce your down payment on the new one. They may also have gotten you an auto loan from the manufacturer’s finance company, local bank, or credit union. It is essential to understand that the main goal of car dealers is to sell their vehicles and preferably at the highest margin, so you might have got an auto loan with a high interest rate.
The good news is that you may lower your rate through refinancing through Chase Bank. It can enable you to save up to $150 per month in loan payments and several hundred dollars over the duration of your auto loan.
When Should You Consider Refinancing Your Car?
You can consider refinancing your car in the following situations:
Your Monthly Payments Are High
High monthly payment rates can negatively impact your personal finances. A Chase auto refinance can help you find a new auto loan with a lower interest rate. That can reduce the installment amount you need to pay per month. If that does not bring out the difference you require, you can consider extending the term of the loan. Bear in mind, though, that a loan term extension means paying more interest throughout the loan.
You Didn’t Research Rates Before
You may not have reviewed your credit score and researched interest rates from different lenders before getting your existing auto loan from the car dealer. Since you hadn’t explored your options, you may not have obtained the best deal possible for you. Refinancing your car using Chase can correct that and save you from continuing to spend more than you need to every month.
Your Credit Score Has Improved
Car lenders use your credit score to decide if they can approve your loan and to determine the credit terms they will offer you. If your credit score was low when you financed your vehicle, it could have influenced the lender to charge you a higher interest rate. If your credit score has improved now, Chase may agree to a lower interest rate, and it can lead to a reduced monthly payment.
Loan Interest Rates Have Decreased
If the interest rates were high when you applied for your existing car loan, you might have ended up with high monthly payments. To reduce these, you should consider refinancing when the interest rates fall. Even a decrease of 2% to 3% in interest rates can make a difference in the installment amount and the interest you have to pay on a monthly basis.
How To Refinance Your Auto Loan
To refinance your auto loan, you might consider the following:
Find Out How Much You Owe
Before you opt for the Chase auto refinance, check how much you still owe on your current auto loan. You can view your loan payoff statement to find out about your payoff amount. The payoff amount is the total amount of money you must pay to the lender to pay off the entire car loan, including principal and interest. The payoff statement is the document that shows the payoff amount along with the daily interest your loan accumulates and any fees that the lender could charge.
Check if Your Equity Is Positive or Negative
Equity is the difference between the current market value of your car and the amount you still have to pay on your existing auto loan. Your equity is positive if the loan amount you owe on your vehicle is less than what your car is worth. If the car has less value than the amount you owe, the equity is negative, and you have an upside-down or underwater auto loan.
Determine if Refinancing Is Worth It
Once you have accurate payoff information, you can decide if it will be worth refinancing your loan. For example, if you owe more on an auto loan than your car’s worth, Chase may not offer you the refinancing terms you want. You will also not qualify for better loan terms if you are behind on your monthly payments for the existing loan.
Refinancing may not make sense if you have almost completed paying your current loan. If your vehicle is older than 10 years or has too much mileage, lenders will not refinance it, and you may benefit more from buying a new car.
Compare Rates Offered by Refinance Lenders
For your benefit, take the time to research different lenders and compare their interest rates before you select a lender. You should also calculate the monthly payments you will have to make on the new loan.
Obtain the Refinanced Loan
You can simplify the loan application process by organizing necessary documents such as your driver’s license, Social Security number, insurance proof, income proof, and original loan contract. In addition, you must provide information about your current loan balance, interest rate, monthly payment, loan duration, and vehicle information. Then read the fine print, sign the paperwork, and obtain the loan.
Chase auto refinance can improve your financial situation in the long term. For convenience and to avoid late fees, consider automating monthly payments.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.