As someone who works in the financial industry, this admission probably opens the door to some office hazing, but I can take it. It feels good to get this off my chest – and if my ignorance about this topic helps someone else in return, then this was all worth it.
No going back now, so let’s get started.
Misconception #1: I thought a refinance was only for a home loan.
Wrong. But, let me set the stage. I didn’t claim to be a financial guru when I started at TTCU. Based on my experience though, I thought I could hold my own. Come to find out, I had a lot to learn about our products and services.
For example, I thought the term "refi" was just a short way of saying “home refinance.” I had done a home refi before, but didn’t know the full scope. A refinance isn’t exclusive to your home. Our credit union helps people refinance their auto loans every day.
Misconception #2: I thought you could only refinance the amount of your existing loan.
I’m guessing you see the trend here. This one was also incorrect. Your refinance amount can exceed the existing loan amount. But why would I make it for more?
Good question. Let’s say the interest rate on your current car loan isn’t great and you also have credit card debt. You can include both pieces in your refinance, which would probably save you money (more on that later) and you can make just one payment.
Misconception #3: With a shorter loan, a refinance wouldn’t really pay off.
Strike three, I’m out! Wrong again. Let’s put some tangible figures to this money-saving piece.
As you might have seen in our recent ads, last year people saved on average $50 a month* when they refinanced their auto loan. Let that sink in just a sec… $50 each month!
Over the course of a year, those members are saving $600 bucks! Now, I don’t know your financial situation, but that money would go a long way at my house.
There they are… the three things I learned about refinancing an auto loan. Similar to a home loan, evaluate your own situation. It doesn’t hurt to review your existing loans and see if you’re happy.
I hope you can put these admissions to good use in your own finances and save some money along the way!
* Your actual savings may vary and depends on the interest rate.