If you are finding it difficult to pay your monthly car payments, there are many ways you can lower the monthly payments. Car payments all over the world have increased significantly, and being timely on them can be super stressful.
Below, we will list a few ways to lower your car payment. We will also discuss the best way to lower your car payment among all. So let’s get to it, shall we?
The Best Way to Lower Your Car Payment
Your car payments are not set in stone. You can change them by talking to your lender or by following any of the four ways below:
- Refinancing your car loan
- Renegotiating your loan term
- Selling your car
- Making extra payments whenever possible
While all of these methods are ideal for lowering your car payments, refinancing your car loan is the best way to do so. You have two options to refinance your car loan in order to lower your monthly payments.
1. Refinance to Extend Your Loan Term and Lower Your Monthly Payments
A shorter car loan term reduces the amount of money you pay in interest over time. However, by extending your loan term, you can reduce the number of monthly payments you are supposed to pay. Sometimes, this amount can be pretty significant. You can extend your auto loan term all the way to 84 months and even beyond, in some cases.
This way, you will be paying significantly low payments every month and won’t have to worry about a huge chunk of your paycheck going to the lender. Make sure to negotiate with your lender about extending your loan term as much as possible. However, do note that you will be paying more in interest by the end of your loan term.
2. Refinance to Get a Lower Interest Rate and Lower Your Monthly Payments
Another way to refinance your loan and lower your car payments is by getting better terms on your auto loan. You can lower your interest rate by 2.4% on average. If the interest rates in your country have lowered ever since you took out the loan, or if your credit score has improved, you can refinance your auto loan to get a lower interest rate.
A 2.4% lower interest rate may seem like a small number, but it can help you make savings of up to $2,200 on your entire loan term. You could definitely use this amount to pay off another debt or pay your bills.
Final Thoughts
Now that you know about the best way to lower your car payment is to apply for auto loan refinancing. Click here.