Most consumers are familiar with mortgage loan refinancing. However, members often tell us they didn’t know they could refinance their auto loan.


Vehicle loans are typically established with 4-6 year terms.  During the loan period, economic and financial situations can change.  You may be able to proactively respond to these changes with an auto loan refinance.  Improvements in market rates, your credit score or your income can add up to big savings.


Rates Change
Annual percentage rates periodically change.  In a rate environment like we are in today, rates have been declining.  If you purchased a car more than a year ago, it is possible that your current interest rate is higher than what is being offered today.  Refinancing could lower your monthly payment while keeping the same term.  Or, refinancing to a lower interest rate and keeping the monthly payment the same could reduce the amount of time it takes to pay off the loan.

Credit Improves
Multiple factors are used in calculating credit scores, including payment history.  After a year or more of timely repayments, a credit score may improve.  A higher credit score may qualify for a lower rate.  Lower rates not only reduce the monthly payment, they also reduce the amount of interest paid over the life of the loan.

Income Changes
If your income has increased, you may want to consider refinancing to a lower interest rate and shortening your term.  Both actions will save finance charges and increase your equity in your vehicle.

Conversely, if your income has decreased and overextended your monthly budget, you may prefer to extend the loan term and lower your payment to help pay other expenses.


To find out if an auto loan refinance is right for you, try our online Loan Saver calculator.  Or, if you prefer the personal touch, with a phone call and a few minutes, we can determine if we can save you money.


You may also be interested in:

4 Ways We Can Help With Your Car
Your home can save you money – on your car
4 Steps to Living Debt Free


by Chris, Vice President, Lending


A $200 fee applies to reduce the rate of an existing PSCU loan.