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Every month, your car payment takes a big bite out of your bank account. The average payment these days is more than $600 a month for new cars and $400 a month for used cars.

What if you could lower your monthly payment by $150 or so? Would that be worth a few minutes of your time?

You should seriously consider refinancing your car loan. This means you replace your existing auto loan with a new loan that has a lower interest rate, saving you money. Why pay more money to the bank than you have to?

Check out this handy auto loan aggregator by a company called ReFiJet. It’ll refinance your auto loan — and as a bonus, you won’t have to pay for the first two months. It can lower your monthly payment and potentially save you thousands of dollars by the time your loan gets paid off.

Maybe refinancing your car loan hasn’t occurred to you, but it’s becoming an increasingly popular option as your average consumer becomes more savvy. And your auto loan is probably your second-biggest debt after your mortgage.

Right now, auto refinance rates are at their lowest in years, starting at just 2.49% APR. Maybe when you originally got your current auto loan, rates were higher, or maybe your credit score was a little lower back then.

It costs you absolutely nothing to find out if you have better options. ReFiJet won’t even do a hard pull on your credit to show you your options, so checking this out won’t hurt your credit.

And finally, applicants with poor or fair credit may qualify. ReFiJet says it can help just about anybody who still owes money on their vehicle.

Here’s how to refinance a car:

See For Yourself How Much You Can Save

It’s as easy as starting your car in the morning. Just go to the site and type in some basic information — your name, date of birth, contact info, etc.

ReFiJet will show you multiple auto loans that you’re pre-qualified for, along with rate and payment estimates. You can see for yourself how much you could save. This is done with a soft credit check that won’t affect your credit. Once you actually apply for a new car loan, your new lender may do a hard credit check — but not until then.

A hard credit pull can make your credit score drop a little bit temporarily, but your score will bounce back if you make your monthly payments on time.

The offers (and each offer’s interest rate) are good for 30 days. If you decide to accept one of the offers, you’ll have the option of working with a financial services representative on the phone, if you want. That person can give you one-on-one assistance during the process.

ReFiJet also says it saves customers an average of $150 a month — which really adds up when you’re making a car payment every month for years.

Reasons to Refinance

Should you replace your existing loan with a new one? It depends on your situation. Refinancing makes sense if any of the following things are true. See if any of them apply to you:

Your Credit Score Got Better

Your credit score is the main thing that banks look at when they’re deciding whether to loan you money and what kind of interest rate to charge you.

Your credit score goes up and down depending on a number of factors, and the most important thing is whether you’ve been making your payments on time.

If you got a car loan when your credit score was lower than it is now, then your current, higher credit score can get you a better loan with a lower interest rate, costing you less money.

Having said that, ReFiJet insists that it can help applicants who have poor or fair credit.

There are any number of ways to check your credit score for free. It’s fairly easy to get a copy of your credit report.

Interest Rates Went Down

If you bought your vehicle when interest rates were higher than they are now, then refinancing could save you a lot of money.

And interest rates are historically low right now. They’re at an all-time low these days.

What does that mean? Basically, it’s never been cheaper for you to borrow money.

You Didn’t Shop Around the First Time

Bet you got your car loan from the dealership when you bought your car, didn’t you? There’s no shame in it — lots of buyers do this for convenience.

The problem is, you might not have gotten the best deal if you went through the dealership. What’s the harm in looking elsewhere to see if you can do better?

Your Payments Are Too Expensive

If your monthly payment is too much for you to afford, refinancing can help.

You have options, here. If you get a loan with a lower interest rate, you can lower your monthly payment — but that might not be enough.

You can extend your loan term — the length of your loan. This gives you more time to pay back the loan.

There are positives and negatives there. Extending your loan can lower your monthly payment, but obviously it’ll take you longer to pay off the loan. Extending the loan term increases the amount of interest that you’ll pay by the time the loan is paid off.

Reasons Not to Refinance

So there are valid reasons to consider an auto loan refinance. But fair warning: Refinancing isn’t for every car owner. Depending on your individual circumstances, there may be a reason not to proceed. Here are those reasons:

You’re Behind on Your Payments

Loan payments can be a lot. If you’ve fallen behind on your monthly payments, then you honestly might have trouble qualifying for a new auto loan. And you’ll certainly have trouble qualifying for a better loan. Sorry, but that’s just the way it is.

If you want to refinance your car loan, make sure to get paid up on your existing loan first.

You Owe More on Your Car Than It’s Worth

People have to put up collateral to get personal loans, but auto loans come with their own collateral. Your car is collateral on your existing loan, and it’ll be collateral on your new loan too. To be perfectly blunt, using the car as collateral means that the bank can repossess the car if you stop making payments on it.

If the outstanding balance on your current loan is higher than the value of your vehicle, you might have trouble getting a new loan.

You Have an Old or Classic Car

Lots of lenders won’t deal with old cars or classic cars or exotic cars, because it’s really difficult to determine how much the vehicle is really worth.

For instance, ReFiJet says it’s not particularly concerned about your car’s mileage, but it won’t issue loans for vehicles that are over 10 years old.

Your 2011 Ford Ranger or Hyundai Sonata or Volkswagen Jetta are out of luck.

Your Car Loan Has a Prepayment Penalty

Prepayment penalties are fees that lenders charge if you pay off all or part of your loan early. You should probably check and see if your current auto loan has such a penalty. (Your lender can tell you.)

Some lenders use this fee to recoup the money they’ll lose when you’re no longer paying interest on the loan. That interest is how they make their money.

If it turns out you’ll have to pay a prepayment penalty, that could wipe out any savings you’d get from refinancing your loan.

Cash Out Refinance Loans

This is something that homeowners sometimes do with home mortgages, but car owners can do it with car loan refinancing, too.

This involves replacing your current loan with a new loan and borrowing an extra amount of money against the equity you have in your vehicle. If your vehicle is worth more money that you owe on it, this is an option.

ReFiJet offers cash-out refinancing for those who want it.

Be careful, though. Even if you get a better interest rate with an auto refinance loan, this increases the amount you owe, and you risk owing more money than your car is worth.

Final Thoughts

Auto loans shouldn’t ruin our lives. You deserve a new loan with a better interest rate and lower loan payments. Don’t let your monthly payment get you down!

You should know that ReFiJet charges a loan origination fee of $395. But it gets rolled into your new loan, so you’ll barely notice it. Also, its competitors generally charge higher fees.

So think about it: You already have the car. You’re still paying for it, even though you’re already driving it every day.

Wouldn’t you like to pay less money to the bank? It costs you nothing to see if you have better options.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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