Can I Lower My Auto Loan Interest Rate? Lomira Auto Shows You How!

When you buy a car, you make a significant financial decision, and securing the perfect rate can save you thousands over time. Many drivers search the web for “How to lower interest rates on my auto loans,” and they go down endless rabbit holes that waste their time and money.

Lomira Auto is here to showcase multiple ways to secure lower rates so your monthly budget doesn’t suffer and you get the best rate possible!

1: Refinance Your Auto Loan

Do you already have a car loan with a high interest rate? Refinancing can be a fantastic way to break away from your sky-high interest and keep more money in your pocket for other expenses, investing, or saving.

When you refinance your car loan, you replace your current loan with better terms and rates instead of being locked into a loan that forces you to fork out more monthly. Refinancing is also attractive if you have rebuilt your credit since you first took out your loan or if rates start to drop!

2: Get a Cosigner

When drivers search the web and type, “Can you lower interest rates on an auto loan?” Many know their credit score plays a role.

If your credit score is less than stellar, resulting in sky-high interest, you can get a family member or friend with fantastic credit to cosign your loan to qualify for lower rates.

How does this happen? If you have a high credit score, you’ll see interest rates that will make any jaw drop, as the lender will see you as a high-risk borrower. When you have a cosigner with better credit, the lender will see you as less of a risk, as your cosigner will be responsible for taking on payments if you default.

3: Opt For a Shorter Loan Duration

Lenders can offer lower interest rates for shorter loans, so you’ll have higher monthly payments. Why do your monthly costs go up? It reduces the total amount you pay interest over the life of this loan, meaning more of your money goes to the vehicle’s price rather than interest.

If you’re considering getting a shorter loan, ensure your monthly budget can handle the higher payments. It’s a terrific way to save money in the long run!

4: Shop Around For the Best Rates

Not all lenders or borrowers are created equal, including interest rates. You must compare your options, as different lenders offer various rates, durations, terms, and more.

What lenders can you go to? Banks, credit unions, dealerships, and more can provide different loans for you, and by getting various quotes, you can negotiate and find the best deal for you!

5: Make a Higher Down Payment

Another fantastic way to lower your interest is to make a larger down payment. These significant down payments will reduce the amount you need to borrow and go toward the vehicle's original cost.

When drivers want to purchase a car, they typically offer a 10%- 20% down payment. Still, if you put down more, you can shorten your loan duration, secure a lower rate, and reduce your interest time. Thus, providing more cash upfront will save you money in the long run!

6: Maintain a High Credit Score

A credit score is one of the most significant factors in determining your interest rate. If you can keep that number high, you can get lower rates on all your loans, including cars!

A high credit score lets lenders know you’re a low-risk borrower, meaning they have confidence you won’t default or fail to pay on time.

To boost your credit or to keep it high, you should:

• Pay on Time, Every Time
• Keep Your Credit Utilization Low
• Avoid Unnecessary Debt
• Don’t Exceed Your Credit Limit
• And More!

Everybody Deserves Lower Rates!

Whether you are about to take out an auto loan or if you’re already paying one-off, refinancing, getting a cosigner, offering a higher down payment, and more, our fantastic financial team at Lomira Auto in Lomira and Neenah, WI, has terrific ways you can lower your interest rates!