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Refinancing Your Loans During COVID-19


on 4/15/2020

Couple sitting on couch with computer

With all the uncertainty surrounding COVID-19 and the world’s financial markets, the Federal Reserve cut interest rates in the U.S. which creates an incredible opportunity for people considering refinancing loans of almost every kind.

With many people adjusting to a life of working from home and taking financial inventory in preparation for tightening belts while riding out the Coronavirus pandemic, this presents a need to substantially trim expenses by reducing your interest rates.

That means you could pay less money each month on loans, freeing up critical funds to help with living expenses, or even invest if you’re thinking more long term. These are just a few of the ways you can refinance loans to create a brighter financial outlook for your financial situation.

Refinancing Your Current Auto Loan

If you currently have an auto loan financed with a dealership or other financial institution, refinancing it with the credit union may help you save significant money each month and over the life of your loan. Even a modest rate reduction could put more money back in your pocket each month. Finding more disposable income during these times is an essential step in weathering the storm.

Mortgage Loan Refinancing

Your mortgage is probably your largest single expense each month. Most people consider the purchase of a home as a major investment in their financial security. The reduction in interest rates could easily put hundreds of dollars back into your pocket each month while simultaneously saving you tens of thousands of dollars, overall, on the cost of your home.

Is mortgage refinancing the right answer for everyone? Not exactly. However, if you can trim your current interest rates between 0.75 percent to one percent, it’s certainly worth considering. If you have an older mortgage with considerably higher interest rates and your credit is currently in good shape, it's a must to consider.

Credit Card Consolidation

Perhaps one of the most significant ways to help yourself and your financial outlook would be to consolidate all your high-interest credit cards into either a personal loan or one single, lower-rate credit card from the credit union. The personal loan would offer the greatest savings and convert your debt from revolving debt to debt that offers a fixed term and interest rate. Both of which is great news for your wallet. Even better, you’ll switch from multiple monthly payments, one for each of your credit cards, to a single monthly payment, making it much easier to manage your finances in the process.

HELOC: Your Emergency Lifeline

If you’re a homeowner, a Home Equity Line of Credit (HELOC) can provide peace of mind knowing you’ll be able to make ends meet financially in the long term. A HELOC allows you to borrow against a portion of the equity in your home, and it acts very similar to a credit card – you only repay what you spend.

The interest rates are lower because a HELOC is a secured loan with less risk for the lender. The best part, you can use the funds for just about anything, debt consolidation, medical expenses, or even emergency money during a job loss.

We’re Here to Help!

Refinancing your loans may appear to be intimidating, but our loan experts are here to help make the process as easy as possible. You can begin the refinancing process online or to learn more, please contact your nearest branch. 

 

© Genisys Credit Union and www.genisyscu.org, 2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited.  Excerpts and links may be used, provided that full and clear credit is given to Genisys Credit Union and www.genisyscu.org with appropriate and specific direction to the original content.

 

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