Refinancing your auto loan is a great way to lower your monthly bills, and the process is much easier than you may think.

Money expert Clark Howard says that nearly everyone with a car loan should consider refinancing because it could be a quick way to save some cash.

Auto refinancing is such an interesting thing because almost nobody ever refinances a car loan, but overwhelmingly most people could benefit from refinancing a car loan.

In this article, I’ll walk you through Clark’s rule for knowing when you should look into adjusting your auto loan, and I’ll share some tips for getting the process started.

We’re all about lower monthly payments here at Clark, but we want to make sure that you’re doing it the right way.

While it might help your monthly budget to refinance a 60-month loan into a new 84-month loan, pushing out the payoff date is actually a poor decision.

Cars depreciate in value, and you don’t want to still owe money on a vehicle when it comes time to trade it in. If you hold onto your cars for a long time (and good for you if you do), you know that, toward the end of your vehicle’s life, there are going to be some repair bills. You really don’t want to have a car payment at that point.

Clark says that any refinance for an auto loan should both lower your monthly payment (by way of an interest rate reduction) and shorten the period of time until you’ve paid off the debt.

The key is that you go into a new loan term that is equal to or shorter than your existing loan, Clark says. Even with low rates, there is no advantage to carrying a long-term auto loan. (más…)

Leer más