Auto refinancing can be an excellent option for car owners looking to lower their monthly payments or reduce the interest rate on their existing car loan. However, before refinancing your car, it’s essential to understand the current market rates and what to expect. In this blog post, we’ll discuss the going rate for auto refinancing and what factors can affect the rates.
The going rate for auto refinancing varies based on several factors, such as the borrower’s credit score, the age of the vehicle, and the loan’s term. Typically, the best rates are reserved for borrowers with good to excellent credit scores, and newer vehicles with lower mileage are more likely to qualify for lower rates.
As of April 2023, the average auto refinancing rate for borrowers with excellent credit scores (above 720) is around 2.5% to 3.5%, while borrowers with good credit scores (between 660 and 719) can expect rates around 4% to 6%. For borrowers with fair to poor credit scores (below 660), the rates can range between 6% and 20%.
However, it’s worth noting that these are just general estimates, and the rates can vary based on individual circumstances. Other factors that can affect the rates include the borrower’s debt-to-income ratio, employment history, and the amount of equity in the vehicle.
When considering auto refinancing, it’s essential to shop around and compare offers from different lenders. Many online lenders offer auto refinancing, and it’s easy to compare rates and terms online. It’s also a good idea to check with local credit unions or banks, as they may offer competitive rates and personalized service.
When refinancing your car loan, it’s essential to calculate the savings and costs involved. While a lower interest rate can lower your monthly payments and save you money over time, there may be fees associated with refinancing, such as application fees, appraisal fees, and title transfer fees.
In conclusion, the going rate for auto refinancing varies based on individual circumstances, but generally, borrowers with excellent credit scores can expect rates around 2.5% to 3.5%, while borrowers with good credit scores can expect rates around 4% to 6%. Before refinancing your car, it’s important to shop around and compare offers, calculate the savings and costs involved, and consider any fees associated with refinancing.