The main reason you should refinance your auto loan when your credit improves is certainly a good one - you can save money! Potentially, a lot of money.
Simply put, if you received an offer letter from City Lending, the terms of your present car loan are less than ideal, and we want to help you get into a better loan. Most likely you are making high monthly payments, you're saddled with a high interest rate, and the balance you have to pay off is substantial.
All of this changes when your FICO score starts to improve. Lenders, including City Lending, start to take notice. Your improving FICO score means you are paying off your debts and making your car payments on time. You're considered less of a risk. And that's why you qualify for an offer of much better payment terms and interest rate from City Lending.
Determining the right time to refinance is a bit of a balancing. You want to give your credit score a little time to heal, but you don't want to wait too long, because you're paying the highest interest and your car has the highest resale value at the beginning, and you'll be missing out on the savings each month you stay in your unfavorable loan.
You may find yourself in one of these scenarios in which refinancing is particularly desirable:
Maybe you were not aware of just how outrageous your payments were going to be, or you felt your choices were limited. But now that your credit has improved, your loan payment situation can improve right along with it. You can take advantage of a better interest rate, reduce your monthly payment and reduce the term of your loan. Even if your credit score improves by just 50 points, you should still consider refinancing. Just think of all the money you'll save, both in the short-term and over the course of the loan.
If you receive an offer letter from City Lending, don't throw it away. Instead, think of all the money you can save by refinancing your auto loan! To find out just how much, call us at 800-391-4346.