This Overlooked Strategy Could Save You Money on Your Car Loan
If you’re like most people, you’ve probably never thought about refinancing your car loan.
Seriously, is that even a thing that people do? It’s not like it’s a mortgage. Wouldn’t that be a huge hassle? How much money could you actually save that way, anyway?
But this under-used strategy really can save some serious cash — and it’s not hard to do at all.
Lantern by SoFi is a loan-comparison site that makes it easy to compare refinancing options from a network of top lenders.
How much could you save? Just look and see. It won’t cost you anything to look.
Cut Your Auto Loan Down to Size
While we weren’t looking, auto loans have become a serious burden on our households. The size of the average auto loan has soared to more than $35,000, according to Experian. Americans are approaching an average payment of $600 a month for new cars and $400 a month for used cars.
Car loan debt is the second-biggest category of household debt, trailing only mortgages.
Some people have reported saving hundreds a month by refinancing their car loans through Lantern’s network lenders, although the amount that you could save would depend on a number of different factors — mainly, how much you’re paying on your current car loan.
Here’s how it works:
Prequalify in minutes: A brief form asks for some basic info about you, your vehicle and your auto loan.
Pay no fees to check your rate: There’s no charge for checking your auto refi rates, and it also won’t hurt your credit if you choose not to go forward after checking.
See how much you can save: Lantern will show you options from a network of lenders. See if you qualify for a lower interest rate and lower monthly payments.
Skip the trip to the DMV: The network lenders at Lantern will do the heavy lifting. They’ll handle paying off your old lender and retitling your vehicle, because who needs that headache?
Some caveats: If your credit score is below 600, you might have a harder time refinancing your loan. It’s also tougher if your vehicle is over a dozen years old.
That still leaves plenty of people who could benefit from a cheaper car loan.
Maybe you’d like a lower interest rate. Maybe you’d like to extend your payments and spread them out some more.
But you definitely want to be saving money, right?
It only takes a few minutes to answer some quick questions and see how much you could save.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He has made so many car loan payments.
* The Penny Hoarder is a Paid Affiliate/partner of Lantern by SoFi. This material is not intended to serve as a recommendation and is not meant to suggest that any of the products mentioned are suitable for all Members, as individual results, needs, and financial situation may vary.
** Please refer to Lanterncredit.com to review all product disclosures, terms and conditions, state restrictions, and fees where applicable.