November 4, 2020Refinancing Loans to Boost Your Savings
Let’s be honest: saving money isn’t as easy as it sounds. You create a monthly budget and try your best to follow it—then something always pops up and throws you off track. Sure, you can switch cable providers or phone plans, but those savings are usually minimal.
Want to see more progress? Then refinance your current loans. You may find you are giving half or more of your income toward monthly loan repayments. By refinancing, you can save a substantial amount of money. You can then place these funds into an emergency or retirement account so you can build your personal wealth.
What is Loan Refinancing?
Loan refinancing can be done in a couple of ways. One way is to review your loan terms with your current lender, and to change certain terms to make it more helpful for you.
Consider switching your current loan to PEFCU. By switching your current loan from another lender to the PEFCU, you could lower your current rate, extend or reduce your loan term, and/or change other aspects of the loan, making it better fit your budget. For instance, lowering the interest rate by 1% could make a major difference in your mortgage or car payment. Check the following video for more info:
When Should You Refinance?
Refinancing loans is usually a beneficial move if your credit score has increased since your loan was opened or if interest rates have declined. Either way, you should always monitor your credit score to see if you are eligible for better rates. PEFCU offers the “FICO” feature with the PEFCU Mobile Banking app which helps you to track your credit score’s progress.
Regarding refinancing, there are also some downsides to note. If you extend the loan term too far, you may become “upside–down” or “underwater” on your loan. This simply means you owe more than the item (i.e., home or car) is worth. For example, this happens when you extend the loan repayment period while your car depreciates in value.
When refinancing loans, it is important to work with an institution you trust, like PEFCU. We will tell you about these scenarios and prevent you from going this route.
What Loans Can You Refinance with PEFCU?
PEFCU offers loans for First and Second Mortgages, auto loans, and personal loans. The PEFCU Personal Line of Credit can be used to combine more expensive loans at a lower rate, which may lower your monthly payments. We also offer low-rate credit cards, which would allow you to transfer higher rate credit card balances over with no balance transfer fee. This could also help you lower your monthly bills and save more money.
We‘re Here to Help!
Your current loans are likely your largest monthly expenses. But they are also the best place to look for the biggest monthly savings, and every loan is an opportunity to save. We are ready to work with you one-on-one, review your loans at other institutions, and help you switch them to PEFCU.
Simply stop by or give us a call at (800) 226-6673 to see how much you could save.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.