How to Lower Your Monthly Auto Loan Payment

What would you do with an extra $100 a month? Would you start saving more for retirement? Put some money away in your kid’s college fund? Pay off debt? It may not seem like a lot of money, but a hundred dollars a month adds up quickly. For most of us, a little extra cash could create a big difference in our day-to-day budget as well as our financial future.

Suppose you bought a car last year at a buy-here-pay-here dealership. In the past twelve months, you have worked hard, established a consistent credit history, and dramatically improved your credit score, going from a D rating to a C rating. You could be eligible for a lower rate, which means a lower monthly payment. For example, a $20,000 car loan at 15% with a five-year term costs over $450 a month. If you refinance that same auto loan at 7%, you save almost $100 every month, or nearly $1200 a year.

Refinance your auto loan because you’re tired of paying for past financial mistakes

Even if you haven’t cleaned up your FICO score since you purchased your car, you should still look into refinancing your car loan with us. Our bad credit car loan rates are typically half of what the dealership can offer. Members who refinance at a D credit rating can expect to lower their monthly payment by $100, on average.

We can also refinance your car loan over a longer term to save you even more on your monthly payment. For instance, if you have three years left on your loan, we could refinance your car loan at a lower rate over a 48-month term to lower your monthly payment considerably. Since you’ll end up paying more over the life of the loan, we don’t recommend lengthening the term unless it’s necessary to preserve your budget and cash flow. However, it can be a useful tool to consider, especially if your car has retained its value.