If you own a car, you have probably heard that refinancing may be an option for you to save money on your monthly payments. And this is absolutely true, under certain conditions. The best time to refinance your auto loan is when one or more of the following is true:
a. average auto loan interest rates are down relative to those of the past few years
b. your credit score has improved over the past few years since taking out your current loan
c. you want to refinance your loan over a longer time period in order to reduce your monthly payment amount
Credit unions are becoming increasingly popular alternatives to banks. In case you are new to credit unions, from the customer's perspective they "look and act" much like a regular bank. They have tellers, ATM machines … and they can extend home and auto loans to their customers.
It used to be that credit unions had very strict membership policies, but now you can find a credit union to join fairly easily without much in the way of pre-qualification. And, they are a great place to shop for refinance rates.
If you are looking for the best credit union rates for auto refinance, try these 5 steps to getting yourself the best rate:
1. Start by checking their websites for posted rate information:
Scope out some of these institutions near you and figure out which ones you might like to do business with. Then, go online to their websites and check out their posted rates for car loans. Of course, they are going to actively promote only their best-possible rates that are available to customers with excellent credit (usually, people with a credit score above 770). However, at least by checking their websites you can get a relative feel for what they are offering. Be sure to take good notes.
2. Make a list of at least 3-5 credit unions:
Now, as you examine the various stated rates, make a list of at least 3-5 of those that seem to have the best interest rates. Also, be sure to review their membership policies to make sure you qualify.
3. For comparison purposes, make a list of 3-5 other types of lenders:
Even though going with a credit union may be your best option, it will behoove you to widen the playing field a bit by researching at least 3 other types of lenders like banks, auto dealers and auto loan financing companies; add them to your list as well. It can not hurt to have more options.
4. Choose a reasonably-priced automobile to buy:
Before you start applying for loans, make sure you have your eye on an automobile that is reasonably-priced. Remember, a lower-price automobile will mean a lower monthly payment – regardless of the interest rate. It may also help you qualify for a lower-interest loan, depending upon your credit score and income.
5. Save up for a good-size down payment if you can:
Before applying, do yourself a favor and save up for as large a down payment as possible. Like tip # 4 above, this, too will help you secure the cheapest-possible loan.
Take these 5 steps to getting the best credit union rates for auto loan refinance.