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Should I refinance my auto loan?

Should I refinance my auto loan?

CNBCa day ago
With increased sticker prices and inflated interest rates, Americans are struggling to keep up with their auto loans. The average monthly car payment has shot up nearly 30% since 2020, according to online auto resource Edmunds.
According to a recent TransUnion survey, nearly two-thirds (63%) of respondents said they're considering within the next 12 months.
With the Fed weighing an interest rate cut in September, refinancing your auto loan could be a tempting option. But is it the right move for you?
Ask yourself these four questions before you decide.
Your original lender considered your credit history when setting your rate. If your score has gone up since then, you're more likely to qualify for a better rate now.
Having excellent credit (a 750 FICO Score or higher) will help get you the best terms, but a substantial increase of any kind can be enough to get you approved for a lower rate.
"I'd say an improvement of at least 50 points would make it worth looking into refinancing," said Brian Moody, an editor at Cox Automotive, which owns Kelley Blue Book.
Because interest rates on car loans have been at record highs for the past two years, people with older loans are facing a different reality, according to Ivan Drury, director of insights at Edmunds.
"If you have a loan from 2019, your interest rate on a new car was probably a lot lower, maybe 4% or 5%," Drury said. "Today, you're looking at something closer to 7%."
Keep an eye on upcoming Fed meetings to see how they impact auto loan interest rates and plan accordingly.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.Geico auto coverage is available in all 50 states and Washington, D.C., with 16 discounts and add-ons like roadside assistance, rental car reimbursement and mechanical breakdown insurance.Progressive offers an array of riders, including rideshare insurance and a Deductible Savings Bank that deducts $50 each policy period you go without a claim. It also offers mechanical breakdown insurance, which covers unexpected major system failures.
To secure their investment, lenders frontload interest at the beginning of your car loan. If you're in the final years of financing, interest is probably only a small portion of your bill. You're mostly paying down the principal.
Refinancing in that situation might not make sense, since you'd restart the interest payment process all over.
"Break out the calculator," Drury said. "It's not fun math, but thankfully, there are calculators. You can see on your loan statements how much of your payment has been going toward interest now versus how much is toward the principal."
If you're worried about falling behind on payments or even your car being repossessed, refinancing could get you a longer term with smaller, more manageable monthly payments. Keep in mind, though, that while your monthly payments will be smaller, you'll have a longer term and could easily wind up paying a lot more in the long run.
Be sure to factor in any loan acquisition fee or prepayment penalty, as well.
Auto loan refinancing allows you to substitute your existing financing with a new loan, ideally at a lower rate and/or a different term length.
There's no set waiting period for refinancing, but you can't get a new loan until your original lender receives the car's title from the manufacturer or previous owner, which can take up to two or three months. If you're concerned about your credit, you should wait at least six months. That's long enough for your credit score to recover from any drop caused by the initial lender's hard inquiry. Waiting a year after the original loan could improve your score even more if you're able to make on-time payments in full during that time.
You must meet certain requirements to refinance, like being up to date on your loan payments and meeting the lender's credit score and income requirements. There may also be limits on the car's age and mileage and the loan balance.
Your car is collateral for the loan, so some lenders won't lend more than 100% of the value of the vehicle. The ones that will usually require good credit and have limits on how much negative equity they'll finance.
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every auto loan article is based on rigorous reporting by our team of expert writers and editors. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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Student Loan Update: Some Borrowers Facing Major Change Within Months
Student Loan Update: Some Borrowers Facing Major Change Within Months

Newsweek

time21 minutes ago

  • Newsweek

Student Loan Update: Some Borrowers Facing Major Change Within Months

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Humphrey Yang: Here's How Much You Should Have in Your 401(k) in 2025
Humphrey Yang: Here's How Much You Should Have in Your 401(k) in 2025

Yahoo

time32 minutes ago

  • Yahoo

Humphrey Yang: Here's How Much You Should Have in Your 401(k) in 2025

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Survey: Nearly 3 in 4 Americans have a financial regret
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Yahoo

time33 minutes ago

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Survey: Nearly 3 in 4 Americans have a financial regret

Managing your personal finances can be complicated. Even for experts, refining a budget, paying off high-interest debt and saving for the future is a matter of trial and error. If you've ever made a financial mistake along your journey, know it's very common — 74 percent of Americans say they have a financial regret, according to Bankrate's new Financial Regrets Survey. Although Americans are currently navigating a number of economic hurdles — including high tariffs, rising prices and sluggish hiring — the percentage of people who say they have a financial regret is actually down slightly from 77 percent in 2024. 'While a majority of Americans still admit to harboring some remorse over their past financial decisions, the decrease is a step in the right direction,' Bankrate Financial Analyst Stephen Kates says. Making financial mistakes and learning from them are all part of the journey towards financial health. If you've made a financial mistake, know you can learn from it and take steps towards recovery starting today. Bankrate's insights on financial regrets Regrets are down slightly, but are still rampant 74% of U.S. adults say they have a financial regret, down from 77% in 2024. Many people are struggling to address their financial regrets 43% of U.S. adults with financial regrets haven't made any progress in the past 12 months, up from 40% in 2024. More affordable essentials could make a difference in many people's financial situations 30% of U.S. adults say cheaper essentials (such as gas or groceries) would most likely improve their personal financial situation in the near future. Bankrate Data Center Since 1976, Bankrate has been the go-to source for personal finance data, publishing average rates on the most popular financial products and tracking the experience of consumers nationwide. See more Fewer Gen Zers have financial regrets this year Saving for retirement, keeping a well-stocked emergency fund and avoiding high-interest debt are some of the most important steps you can take for your financial health. Accordingly, Americans' top two financial regrets are not saving for retirement early enough (22 percent) or taking on too much credit card debt (15 percent). Everyone saves for retirement at their own pace, but a good benchmark is to save the equivalent of one year's salary by the time you turn 30 and eventually have 10 times your salary at retirement age. However, as of the fourth quarter of 2024, the average 401(k) balance is only $131,700, and the average IRA balance is only $127,534, according to Fidelity. Assuming someone has both accounts, they would still have a lot of saving left to do to hit 10 times the average U.S. salary of $67,920. With so many Americans having a fraction of what they need to retire comfortably, it makes sense that so many would regret not saving for retirement earlier. 'A lack of early retirement preparation is still a major regret for many Americans, especially older Americans,' Kates says. Source: Bankrate's Financial Regrets Survey, July 9-11, 2025 Similarly, taking on too much credit card debt is common in part because of how easy it can be for credit card debt to spiral out of control. The average credit card balance is $6,371, according to TransUnion. If you were to carry a balance on your credit cards — as many people do — and only make the minimum payments at the average interest rate of 20.13 percent, you'd be in debt for more than 18 years and pay thousands more in interest. Avoiding carrying a balance on your cards is the best way you can keep from paying extra in interest. Not saving enough for emergency expenses was the third-most common regret, but notably, the percentage has fallen since 2024 — from 18 percent in 2024 to 13 percent in 2025. A small percentage of Americans cited taking on too much student loans debt (5 percent), not saving enough for their children's education (3 percent), buying more houses than they could afford (2 percent) or something else (15 percent). Generation-wise, the percentage of Gen Zers who said they regretted not saving enough for an emergency fund dropped from 26 percent to 12 percent, a bigger drop than any other generation. As Gen Zers struggle to balance their budgets amid high prices, student loan debt and unaffordable housing, they are also the likeliest generation to say they have no emergency savings, according to Bankrate's separate Emergency Savings Survey. What's more, Gen Zers are still young, and many may not have run into an expensive emergency yet. If they do, their attitudes toward saving for emergencies could change. Additionally, 15 percent of women say not saving for emergency expenses is their financial regret, compared to 11 percent of men. Generally, according to U.S. Bureau of Labor Statistics (BLS) data analyzed by Bankrate, more women than men say they are facing high prices of everyday goods, and they tend to feel worse about the economy and their shot at the American dream overall (including goals such as homeownership, being able to retire or having a successful career). Progress on financial regrets has stalled Year-over-year, relatively few people have made progress on their financial regret. Only 15 percent of people with a financial regret have made 'significant' progress on it in the last 12 months, virtually unchanged from 2024, when 16 percent of people said the same. Similarly, 42 percent of people with a financial regret have made 'some' progress on it in the last 12 months — 44 percent of people said the same in 2024. Forty-three percent of people with a financial regret say they haven't made any progress on it in the last 12 months, as of 2025. In 2024, 40 percent said they hadn't made any progress on their financial regret. 'Our data show that while fewer Americans report having financial regrets, those who do are making less progress in addressing them,' Kates says. 'The same groups that saw the biggest declines in financial regrets, young Americans and those with the lowest incomes, are also reporting the least progress. This highlights the growing gap between those achieving their financial goals and those falling behind.' Progress on financial regrets, by generation and income More younger Americans (Gen Zers and millennials) year-over-year say they haven't made any progress on their regret. Specifically, more than 1 in 3 (36 percent) of Gen Zers with a financial regret say they haven't made progress on it in the last 12 months, compared to 26 percent in 2024. Gen Xers and baby boomers with a financial regret were relatively unchanged year-over-year: Percentage of Americans who haven't made progress on their financial regret, by year and generation 2024 2025 Gen Zers (ages 18-28) 26% 36% Millennials (ages 29-44) 36% 47% Gen Xers (ages 45-60) 46% 44% Baby boomers (ages 61-79) 45% 43% Source: Bankrate's Financial Regrets Survey, July 16-18, 2024 and July 9-11, 2025 Across income brackets, more than half (58 percent) of Americans with a financial regret who make under $40,000 say they haven't made progress on it, up from 50 percent in 2024: Percentage of Americans who haven't made progress on their financial regret, by year and income level 2024 2025 Under $40,000 per year 50% 58% $40,000-$79,999 34% 39% $80,000 per year or more 29% 24% Source: Bankrate's Financial Regrets Survey, July 16-18, 2024 and July 9-11, 2025 Rising prices are taking a toll on personal finances Over the past several years, rising prices have impacted Americans' mental health, affected how they save and even influenced how they voted in last year's presidential election. Now, 30 percent of Americans say cheaper essentials, such as gas and groceries, would likely improve their personal financial situation in the near future — more than any other factor suggested by Bankrate: Source: Bankrate's Financial Regrets Survey, July 9-11, 2025 *I don't think there's anything that would improve my personal financial situation in the near future Fifteen percent of people say labor market-related factors would improve their personal financial situation. Specifically, 11 percent cite better job opportunities and 4 percent cite better job security. Americans are thinking about their work situation more as the Trump administration's higher tariffs and AI are coinciding with a narrower job market for white-collar workers. Also, employers are holding off hiring — U.S. employers added fewer jobs in July than expected, according to CNBC. The U.S. Bureau of Labor Statistics (BLS) also amended its figures to note that job growth in May and June was only a fraction of what it originally reported. New graduates are having an especially difficult time looking for white-collar work, as some companies are replacing entry-level jobs with AI. Gen Zers are far less likely than older generations to say cheaper essentials would improve their personal financial situation. Instead, they tended to cite job opportunities and job security. Other people say lower rent (10 percent) or rising stock market values (7 percent) would improve their personal financial situation. Only 6 percent of people each cite a drop in interest rates or income tax cuts. 'While a focus on jobs and rent skewed towards younger populations, the desire for lower-cost essentials spanned all ages and regions,' Kates says. By region and income level Across regions, people in the Midwest are most likely to say cheaper essentials would most likely improve their personal financial situation in the near future: Northeast: 25 percent Midwest: 33 percent South: 30 percent West: 30 percent Regardless of income level, the plurality of Americans say cheaper essentials would most likely improve their personal financial situation. On the other hand, people who make under $40,000 were likeliest to say lower rent would most likely improve their personal financial situation in the near future: Under $40,000 per year: 17 percent $40,000-$79,999 per year: 11 percent $80,000 per year or more: 3 percent 2 ways to tackle your financial regrets Financial mistakes happen. If you made a money-related mistake in the past, it's likely you can still take steps today to recover — or at least make sure you don't make the same mistake again. 1. Meet with a financial advisor Whether you want to make a budget or completely change how you invest, you don't need to navigate your financial recovery alone. Consider reaching out to a financial advisor near you. Financial advisors can help far beyond just managing assets, offering guidance on debt payoff strategies, budgeting, retirement planning, saving for you or your children's college education, estate planning and more. Plus, many local financial advisors don't have minimum asset requirements, meaning people of all income levels can seek out their services. When choosing a financial advisor, it may be helpful to look into a few things first: Identify what you're looking for ahead of time so you can take advantage of the advisor to the fullest extent. Do you want to become debt-free? Are you looking for someone to help you make retirement contributions? Consider bringing three big goals to your first appointment so you can see if the advisor is the right fit. Make sure your advisor is a fiduciary — meaning they are legally required to act in the best interest of their clients. Also, you may want to prioritize a fee-only financial advisor, instead of someone who charges a portion of your assets under management. That's the more affordable option for most people. Bring a list of questions to make sure they're the right fit. Make sure they understand your financial goals. 2. Brush up on your financial education If you want to avoid having financial regrets in the future, you can learn more about personal finance through free online courses, which can teach you the basics of personal finance or dive into more complicated topics like retirement and investing. If you're not quite looking to take courses, these guides can also walk you through personal finance basics: How to make a monthly budget How to save more How to pay off debt How to set up your 401(k) How to invest in index funds Methodology All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,078 adults. Fieldwork was undertaken between 9th – 11th July, 2025. The survey was carried out online and meets rigorous quality standards. It gathered a non-probability-based sample and employed demographic quotas and weights to better align the survey sample with the broader U.S. population. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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