Refinancing your auto can be a smart move to lower interest rates, reduce monthly payments, or adjust the loan term. But let’s face it - navigating the auto refinancing landscape can feel a little overwhelming. Fear not! We interviewed PSECU’s Nick Elsener, Director of New Member and Loan Application Processing, who has some tips and tools that can make your auto refinancing journey a little smoother.
Many people may be familiar with refinancing their homes but may not know there are options to refinance their auto loans. Why do people usually choose to refinance their auto loans?
Nick Elsener: There are many reasons why people are eager to refinance their auto loans. Primarily, we see people looking to decrease their monthly payments. But maybe they want to shorten the length of their loan term or reduce interest rates. Maybe they want to remove a cosigner or get some extra cash from their car’s equity. Every reason is unique; there’s an option for nearly everyone’s needs.
If someone is trying to decide if refinancing their auto loan is right for them, what key factors should they consider?
Nick: Before you hit the ground running, do your homework. I can’t stress that enough. When researching auto loans, make sure you read and understand the fine print of the loan terms. Don’t be afraid to ask questions. And be cautious of any hidden fees that auto loan providers may charge like loan processing or origination fees. These are the kind of fees we don’t charge at PSECU.
What are common mistakes people make when refinancing their car?
Nick: As mentioned, many people choose to refinance their auto loans so they can decrease their payments, which is perfectly fine. But they may not be aware of the potential pitfalls that often come with those lower payments. So, it’s important to look at the big picture. Some lenders may offer lower payments but have really high-interest rates or longer loan terms, or they may tack on additional fees that can ultimately lead to more interest paid over the life of the loan. That’s why at PSECU, we offer competitive rates and flexible terms; we want to give members the power to choose a plan that works for their budget without costing them more in the long run.
You mentioned auto refinancing options. What options are available at PSECU?
Nick: We have a variety of refinancing options available. Think of it like this: choosing the best auto refi option is like choosing a route to travel. Not all routes suit every traveler, so it’s important to know which one will lead to your desired destination. Let me break each option down a bit:
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Rollover. This option is best for those looking to swap their current auto loan from another lender to PSECU.
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Refinance. Think of this option as giving your existing PSECU auto loan a little refresh. Whether you need a different monthly payment or want to shorten your loan term, you can refinance up to 100% of your car’s retail value; however, keep in mind that the car’s minimum value must be at least $3,000. And it’s also important to note that there’s a $1,000 minimum cash out required to refinance.
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Lease buyout. If your auto lease is coming to an end, you can buy out the lease and make the car yours.
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Member-owned. If your car is already paid off, you can choose to refinance and borrow up to 100% of your car’s retail value in cash.
So, now that we have a better understanding of auto refinancing and the options available, let’s talk about how you can refinance your auto loan with PSECU. Could you walk us through the steps?
Nick: Sure! Like any application process, the first step is to apply for a loan. This can be done online at psecu.com/loans/auto-loans/refinance or over the phone at 800.LOAN.555 (800.562.6555). The process is pretty quick. Applicants often hear back from us on the same day – sometimes within minutes! Once you’re approved, you can check out your loan and payment details, including your due date, in digital banking.
Do you have any tips or tools that could help members determine whether refinancing is a good idea?
Nick: Absolutely. Our online loan calculator is a great tool for helping you understand monthly payments and total interest charges and decide if refinancing your auto loan is the right move for you.
Every driver’s journey is unique, and the best route for one may not suit another. With these tips and tools in your glove compartment, you’ll be well on your way to a smoother auto refinancing experience. Ready to shift gears and take control of your auto refinancing journey? Visit psecu.com/loans/auto-loans/refinance to check out our current rates and to get started.
