Disclaimer: Upstart is not a financial advisor, the following content is for informational purposes only.

Do you ever have that nagging feeling that you might get a better deal on your car loan? Refinancing a car loan won’t help in all cases, but for many people it can make a world of difference.

The key is to know whether you would benefit from a car refinance or not. People have many good reasons to refinance. If any of these things sound like you, chances are it could help:

1. Do you want a lower monthly car payment?

According to Experian, the average monthly car payment in 2021 for a used car is $430. That’s a lot of money to pay, especially if you’re struggling to make ends meet.

One of the advantages of transferring is that you can often refinance your car loan for a longer term. This spreads out your payments more over time so they’re all lower. Upstart-powered lenders offer auto refinance loans from two to seven years.1

The disadvantage is that you pay for a longer period of time and that you may therefore pay more interest over the term of your loan. But if you are having trouble making your monthly payments, it can certainly help reduce the amount of financial stress in your life.

2. Do you want to pay less over the term of your loan?

Wouldn’t it be nice if you could keep as much money in your bank account as possible instead of sending it to a lender? That’s another major reason people refinance a car loan – to reduce the amount of interest they pay on their loan.

This can happen in two ways. You can refinance for a shorter term and/or a lower interest rate. Any of these scenarios can cause you to pay less interest over time. Of course, if you can do both, you will get even more savings. At Upstart, we use artificial intelligence to bring you smarter rates.

3. Have your credit score or financial circumstances changed?

If you are like most people, your credit score will increase over time as you learn to manage your credit and expand your credit history. Your finances can also improve as you progress in your career and earn pay raises.

These are all great times to refinance, especially if you were in a less than ideal situation when you took out your car loan in the first place. Even if you’re in the process of building your credit score, it’s worth checking your auto refinancing options through Upstart because we consider more than just your credit score.

4. Do you want to remove a co-signer or co-signer from your loan?

Cars are expensive, and you may have shared the car (and the loan) with another person, a co-worker. Or maybe your credit score wasn’t the best when you took out the loan and you needed a co-signer for the loan.

If your circumstances have changed and you want the lender or co-signer to take over the loan, refinancing a car loan can be a good way to do it. Please note that if you refinance a car loan through Upstart to remove a sharer, we will need their consent.

Auto refinance loans not available in IA, MD, NV or WV. Auto refinancing loans in IL and MO come from Cross River Bank or Midwest BankCentre. Auto refinancing loans in CO, KS and TX are from Cross River Bank of Rising Bank member FDIC. Auto refinancing loans in FL, GA and AL are from Cross River Bank or Drummond Bank member FDIC. All other auto refinancing loans come from FDIC member Cross River Bank. 1 The full range of available fares varies by state. The average 5-year loan offered on Upstart has an APR of 16.24% and 60 monthly payments of $492 per $29,497 borrowed. For example, the total cost of a $20,000 loan is $28,940. APR is calculated based on 5-year rates offered in the past 1 month. There is no deposit and no prepayment penalty. Your APR is determined based on your creditworthiness, income, and certain other information you provided in your loan application. Not all applicants are approved.

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This post The best ways to determine if car loan refinancing is right for you was original published at “https://mint.intuit.com/blog/loans/best-ways-to-determine-if-car-loan-refinancing-is-right-for-you/”

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