COVID-19 Advantages to Refinancing your Car Loan
The uncertainty of COVID-19 has us all on the edge of our seats regarding our financial means. If you’re one of the thousand Canadians, who have recently been laid off during these uncertain times refinancing your car loan can provide the financial relief you are looking for depending on your situation.
Reasons to Refinance:
- Reduce Interest Rates
- Lower Monthly Payments
- Improve Cash Flow
Reduce Interest Rates
One of the main reasons to refinance your car loan is that you have the opportunity to reduce your interest rate. If your credit score has improved since the last time you took out a car loan, you most likely will have access to better interest rates. By lowering your interest rate, it will result in a lower interest cost providing you that financial relief over the life of the loan. It’s best to refinance early as possible, check with your lender to see if you can receive a better offer.
Lower Monthly Payment
Refinancing your car loan can lead to lower monthly payments. Adding two years onto your loan should substantially lower your monthly payment (depending on the interest rate you receive). However, you will be extending your payments for two more years; this will free up your available monthly cash flow. Whether you are lowering your interest rate or extending the duration of your loan, your new loan balance should be smaller than your original loan.
Improve cash Flow
By reducing your interest rate or longing the term of your payments, this will result in a healthier cash flow allowing more money available in your budget for other monthly essential expenses, making it more manageable and providing that financial relief.
Depending on your financial situation, it may be in your best interest to refinance your car loan. Advise your lender; they are there to help you despite your credit score.
AutoLoans.ca is committed to assisting our Customers affected by COVID-19. For any questions or concerns regarding refinancing your Car Loan, please visit us at https://www.autoloans.ca/car-loans-ontario/