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Should I Refinance?

Should I Refinance?

According to Nerd Wallet, on average, Americans are spending $738 a month on new vehicle payments. Whether you're driving a sleek sedan, a rugged SUV, or a reliable truck, chances are you financed your vehicle purchase with an auto loan. While getting behind the wheel of your dream car is exciting, that loan could cost you a lot more money than it should. That's where refinancing comes in. Let’s explore the reasons why refinancing your auto loan could be a smart move.

Why Refinance Your Auto Loan?

1. Lower Interest Rates: Interest rates fluctuate over time, and if you secured your auto loan when rates were high, you could be paying more than necessary. Refinancing allows you to take advantage of lower interest rates, potentially saving you hundreds or even thousands of dollars over the life of your loan.

2. Improved Credit Score: If your credit score has improved since you initially took out your auto loan, you may qualify for a better interest rate. Lenders consider your credit score when determining loan terms, so a higher score could result in a lower rate through refinancing.

3. Reduced Monthly Payments: You can extend the term of your loan with refinancing, which may result in lower monthly payments. This can free up more room in your budget for other expenses or savings goals.

4. Change in Financial Situation: Life circumstances change, and your financial situation may be different now than when you first got your auto loan. Whether you've experienced a pay increase, a decrease in expenses, or other changes, refinancing can help align your loan terms with your current financial status.

How to Research Refinancing Options:

1. Check Your Current Loan Terms: Review your existing auto loan agreement to understand the current interest rate, remaining balance, and any prepayment penalties. Knowing these details will help you evaluate potential refinancing offers.

2. Assess Your Credit Score: Obtain a copy of your credit report and check your credit score. A higher credit score typically translates to better loan terms. If your score has improved since you first obtained your auto loan, you may be eligible for lower interest rates through refinancing.

3. Shop Around: Research multiple lenders to compare interest rates, loan terms, and fees. Banks, credit unions, online lenders, and even some car dealerships offer refinancing options. Don't forget to consider customer reviews and reputation when evaluating lenders. Sandia Area strives to give members the best rate with auto refinance loans starting at low as 4.99%!1. Get started here

4. Calculate Savings: Use online calculators or speak with lenders to estimate how much you could save by refinancing. Factor in potential savings on interest payments and any fees associated with refinancing.

5. Gather Necessary Documentation: Prepare the required documents, such as proof of income, vehicle information, and identification, to streamline the refinancing process.

6. Submit Applications: Once you've selected a lender, submit your refinancing application. Be prepared to provide the necessary documentation and respond promptly to any requests for additional information.



Refinancing your auto loan can be a strategic financial move that saves you money and improves your overall financial well-being. By taking the time to research your options and understand the refinancing process, you can secure better loan terms and drive towards a brighter financial future. Whether you're looking to lower your interest rate, reduce your monthly payments, or consolidate debt, refinancing puts you in the driver's seat of your financial journey.


Federally insured by the NCUA. An Equal Opportunity Lender. Membership eligibility required. Visit Sandia.org/Membership for complete details. 1. APR = Annual Percentage Rate effective as of 12/20/2023. Rates are subject to change at any time without notice. All loans, terms, and conditions are subject to credit approval. Not all applicants will qualify for the lowest rate. Actual interest rate charged is based on credit history, age of vehicle and terms of the loan, which can only be determined upon receipt of application.

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