In Oklahoma, a vehicle is a necessity. Which is why you probably love the new set of wheels you purchased a year or two ago. Unfortunately, at the time you purchased the car, you didn’t know much about interest rates and how they’d affect your monthly payment.
Now your credit score is healthy but your interest rate is still high, and you’re looking for alternatives.
Look no further than a WEOKIE refinanced auto loan.
Timing is everything when it comes to refinancing your auto loan with a credit union. We’ll help you get started by outlining this process.
Scenario 1: You’re No Longer Upside Down on Your Loan
Everyone knows that driving a new car off the lot reduces its worth significantly. It's one of the few downsides to buying new rather than used.
Unless you made a substantial down payment, it could take longer than a year before the value of the car is the same as your remaining loan balance. When you owe more than the car is worth it’s called being “upside down” on your loan.
It’s typical for new car owners to briefly experience being upside down on their loan, which is why GAP coverage is critical when you buy new.
Owing more than a vehicle is worth is not the best way to approach a new potential lender. So first things first: you need to get on top of your auto loan. One way to do this is to pay extra on your monthly payments.
Scenario 2: Interest Rate Specials are Available
The best time to refinance your auto loan is when industry rates are low.
Special promotions are not a guarantee that you will receive the lowest rate available, but you might find a lower rate than you have now. You can potentially save hundreds in interest and have a lower monthly payment when you land a lower interest rate.
Sometimes lenders will offer seasonal or end-of the-year rate specials. Many lenders will also offer introductory rates for new members. See if you can compound any additional bonuses to drive that interest rate down even further.
WEOKIE offers no obligation conversations with our advisors who invite you to sit down and talk about your finances.
Scenario 3: You Learn that Your Special Rate at the Dealership wasn’t so Special
Once you’re no longer upside down on your car, you can start shopping around to get out from under your high-interest rate.
If your loan term is six or seven years, you could also get a shorter-term loan to lower the interest rate. You might pay more each month, but you could save in the long run.
It’s also possible that your interest rate was so high that you could shorten the length of your term, land a lower interest rate, and pay the same monthly payment for less time.
Scenario 4: You’ve Finally Improved Your Credit Score
Building your credit score is something that takes time. You have to pay your bills on time by working hard not to miss a single credit card or loan payment.
You also have to keep up with your other financial obligations. Eventually, this will lead to a better credit score based on your excellent reputation for repaying your debt.
If you haven't checked your credit score yet, annualcreditreport.com is the federally mandated website that allows you to get your full credit report from all three bureaus once a year.
You can spot any errors and fix them, and within a few short months after removing the errors, your credit score can have a healthy increase.
If you’ve lowered your debt over the last few years, you might improve your credit score because your debt-to-income ratio has improved.
With an improved credit score comes the opportunity for you to get a better loan.
Scenario 5: Your Lease is up, but You Want to Keep It
If you leased your car, you might have found that you like it too much to worry about getting into a new vehicle. In this case, you’d need to work with your lender to get an appropriate loan for your leased vehicle. If it happens during a special promotion, that’s even better!
Are you still looking for ways to save money on your vehicle purchase? If so, download our free refinancing case study that gives you an inside look at how you can save every year on your auto loan.
If you have any questions about getting a WEOKIE auto loan or refinancing your current loan, feel free to stop in and visit with any of our advisors, or call us at 405-235-3030 or 1-800-678-5363.