Sometimes, getting your finances in order can include going back and revisiting old decisions. This can include looking at any debt you are currently paying off in order to determine if you are currently utilizing the best debt-payoff strategies that are available to you.
Ways to Speed Up the Process of Getting Out of Debt
There are a number of ways to get out of debt faster than just continuing to make minimum monthly payments to your various loans.
Some methods include:
- Find out your payoff amount for each loan and try to pay off the entire remaining amount instead of continuing to make payments.
- Apply for a personal loan that consolidates your debt and gives you one consistent payment rather than several different payments every month.
- Refinance your existing loans to get a better interest rate, lower principal, or better terms.
What is Refinancing?
The first time you take out a loan to make a major purchase, such as a house or car or home improvement project, that process is called “financing.” A lender evaluates your credit history, debt, and current income to determine whether or not to loan you the money you need for your purchase.
They offer you a loan with financing terms, which include: how much you owe, how much you will pay in interest, and how long you will take to pay back the loan. There will also be other fine print, including late penalties, payoff terms, etc.
Refinancing, then, is when you have a lender offer you a new financing agreement that replaces the old one.
Here are some things you need to know about refinancing:
- You may work with the same lender, or you may choose a new lender.
- Refinancing can change all of the terms of your financing agreement, including the interest rate, the payoff terms, and the monthly payment amount.
Why Do Some People Refinance Their Auto Loans?
You probably haven’t heard about auto loan refinancing as frequently as you have heard about home refinancing, also called a “second mortgage.” That doesn’t mean that auto refinancing isn’t something to consider!
Auto refinancing can be a great way to improve your financial situation. The people who benefit the most from refinancing are those who have seen an improvement in their finances since taking out a car loan but are still paying a really high car payment or have many years left on their loan.
In order to refinance an auto loan, you will want to shop around with different lenders, including federal credit unions like WEOKIE, to see who can offer you the best terms.
How to Prepare to Refinance Your Auto Loan
There are some things you can do before you seek out a refinancing agreement with a lender.
First, check out our blog post on the basics of refinancing an auto loan.
Next, work on improving your debt-to-income ratio (DTI), which compares all of your income and debt. The two main ways to do this are to increase your income and reduce your debt. If you can’t do both of those things, focus on one of them.
Finally, strategize ways to boost your credit. The better your credit score, the better your refinancing rate will be.
Ready to learn more?
At WEOKIE, we have helped countless members refinance their auto loans in order to reduce their monthly payments and improve their credit scores. We would be happy to help you figure out if refinancing is the right path for you. Your specific financial circumstances and goals will help us come up with a great plan of action for you.
We look forward to helping you take the next steps towards improving your financial situation. Check out our easy loan calculator, and let us know how we can help you during this difficult time. We might be able to help you save hundreds or thousands of dollars. We’ve already helped many people just like you.
Contact us today to set up an appointment or call us today at (405) 235-3030 or 1-(800) 678-5363 to visit about refinancing your auto loan.