One of the ways drivers can conserve money on their monthly car note is by refinancing their existing auto loan. While refinancing isn’t right for every car buyer, there are certainly many buyers who would benefit from it. It’s important to weigh the perks versus the cons to decide if it’s right for you. Our Mercedes-Benz financing experts at Mercedes-Benz of Jacksonville are providing all the details.
How Refinancing Works
When you refinance, you apply for a new loan to replace your existing one with a lower interest rate. We collect your employment and housing info again and check your credit. You’ll need to be able to verify this information, so bring proof of income, a lease/mortgage agreement or utility bill, your driver’s license, and proof of auto insurance.
Getting New Rates
One of the main reasons that buyers consider refinancing is to get new loan terms. If your credit has improved, you may get a better interest rate, which reduces how much you pay overall. Also, it’s a great option whenever national interest rates decrease. Either way, refinancing can help you pay off your loan sooner, or you could get lower monthly auto payments.
The Impact of Refinancing
While refinancing can lower your loan amount or monthly payments, it does come at a cost. For starters, you may owe fees, such as prepayment penalties, origination fees, or application fees. It can also negatively impact your credit by having another hard inquiry on your credit report.
Extra Factors to Consider
Before applying, make sure to check your credit. If your score is lower, you could end up paying more. Also, you need to consider your vehicle. Older vehicles often get higher interest rates, and negative equity can make it difficult to refinance at all.
Refinance Your Auto Loan in Jacksonville, FL
If you’re ready to lower your monthly payments, we can help you refinance your loan directly at our dealership. Our team is happy to review your options with you to see if it’s your best route. Visit Mercedes-Benz of Jacksonville to get started today!
