We’re all looking for ways to put money back into the family budget. Sure, you can eliminate streaming services, cut back on snacks, or eat out less often. But, one of the often-overlooked ways of reducing monthly expenses is to refinance your auto loan. Here’s how to know if a refinance could work for you.

You Recently Bought Your Vehicle at a Dealership

Did you buy your current vehicle using dealership financing to get special incentives or cash-back offers? Chances are your rate was higher to offset those special deals. As long as today’s rates are lower, you could save money every month. Additionally, by extending the terms of the loan (the total number of monthly payments), you could lower the amount you spend every month.

You Have Less than 12 Payments Remaining

Paying off your vehicle feels great and can be a boost to your overall financial life with one less car payment. But, if you’re looking for ways to add money back into the budget, refinancing to a longer term might help, even if rates haven’t changed much. That’s because you’ll be spreading out the remainder of what you owe over several more years. In some cases, your monthly payments could be cut in half.

Your Credit Has Improved

Anytime your credit score improves, it increases your chances of securing a better rate—especially with an auto loan. If your credit score has risen dramatically since you first financed your vehicle, check with your credit union about a better rate and extending the term of the loan. You could see a reduction in your payments. Additionally, you might not spend much more on interest.

When to Avoid a Refinance

As long as the savings on the monthly payments are worth the cost, refinancing can help with the monthly budget. However, if your vehicle is not worth what you owe, a refinance might not be possible. If your current loan has a pre-payment penalty, the cost of paying off the loan early might make refinancing too costly. Additionally, before refinancing your loan, do the math. When you refinance and extend the term, you are making interest payments over a longer period of time, which will cost you more. Yes, you might save money every month, but the total cost of your loan will go up in most cases.

This column courtesy of Transportation Federal Credit Union. Looking for more financial advice as well as help refinancing your vehicle? Visit Transportation Federal Credit Union at TransFCU.org.

TRANSPORTATION FEDERAL CREDIT UNION CELEBRATES GRAND OPENING OF ALEXANDRIA BRANCH & REMODELED HEADQUARTERS

Transportation Federal Credit Union (TFCU), celebrating 85 years of service this year, recently marked another significant milestone with the grand opening of its newest branch and the revitalization of its headquarters on April 17th.

After three decades, the credit union’s headquarters underwent a complete renovation, breathing new life into its operations. The credit union now boasts a total of four branches: two situated within the Department of Transportation and the Federal Aviation Administration buildings in Washington, D.C.; one in the Department of Transportation Volpe Center in Cambridge, Massachusetts and now the latest full-service branch in Alexandria, Virginia.

Members, Board of Directors, credit union leaders, staff as well as Alexandria City and Chamber of Commerce representatives were all in attendance for the event.

Transportation Federal Credit Union is excited to serve the Alexandria community and welcomes individuals who live, work, and worship here to open an account.