Refinancing isn’t just for your home.
If you’re looking to lower your interest rates and your monthly payments, it can be the right choice for any loan.
- When Your Credit Score is Looking Good
Your credit score is a magic number when it comes to loans; it’s a measure of your financial responsibility. Aim for a score of 700 or higher. This way, not only will your request for refinancing be more likely to be approved, but you’re also more likely to get a lower interest rate in the process. A few extra months of solid credit history, such as making payments on time, can be enough to improve your score and it adds up over time.
- When You Have More Than One Loan
Many choose to refinance to consolidate multiple loans into a single loan. This is especially popular with student loans. It makes it easier to keep track of the loans and make payments when they’re all in one place. You may also get a lower interest rate in the process.
However, be cautious. Refinancing federal loans into private loans can mean you’ll lose some of the federal student loan benefits. This works best when refinancing several private student loans.
- When You Want to Restart the Clock
Refinancing often extends the amount of time you have to pay off a loan. This should mean that your monthly payment decreases. This can be a good thing – you’ll be able to afford the payments now, and have more cash flow for the rest of your budget. If you’d like, you always have the chance to pay extra toward your loan each month as you get pay raises in the future.
- When You’ve Repaid Other Debts
Lenders will look at your other consumer debt such as mortgage, credit card or auto debt. It can be helpful to pay these debts down before you apply to refinance something like a student loan, for example.
If you’re considering refinancing a loan, look to the experts at Great River Federal Credit Union. From auto loans to mortgages to personal loans, we’ll to help you out every step of the way.