5 Tips for Recalibrating Your Auto Loan Strategy
When auto loan rates drop, it can be a great time to considering refinancing your current auto loan. Taking the right steps when trying to recalibrate your auto loan strategy can help you save money and get out from under a loan sooner.
1. Compare rates and terms from different lenders
The rates available for auto loans vary from lender to lender. It pays to shop around when looking for an auto loan and find the best rate and terms. Many lenders advertise loan rates as low APR%, so be sure to read the full terms and conditions of any loan before committing. If you’re already in an auto loan, you may also be able to get a lower rate by refinancing.
2. Know your credit score
Your credit score is an important factor for auto loan interest rates. Knowing your credit score can help you find the best rate available and understand accessible terms. It’s important that you stay on top of your credit score, making sure there are no discrepancies or errors that may be impacting it.
3. Dedicate monthly payments to principal
Consistently make more than just the minimum payment whenever possible. This extra money should be dedicated to your principal balance, helping you pay off your loan sooner and potentially reducing the overall interest you’ll pay.
4. Sign up for automatic payments
Set up your auto loan payments to be paid off automatically with each billing period. This will help you make sure the loan is paid off on time and in full while avoiding penalties and additional fees.
5. Consider a shorter term loan
Replacing your loan with one of a shorter term may be an option at lower rates. A shorter loan usually comes with higher payments, but in the end you’ll pay less in interest and get out from under your loan sooner.
Recalibrating your auto loan strategy can help you save money and time. Be sure to shop around for the best rate and terms and understand your credit score. Set your loan payments to be automatically paid off each month and consider a shorter term loan to reduce the amount of interest you’ll pay.
Start your auto loan search today by comparing rates and terms from different lenders.
