If you have decent credit, refinancing might lower your interest rate. That means more of your monthly payment goes to the principal, and less gets eaten by interest. It’s like putting your loan on a diet—same calories, but more nutrition.
Be warned: you usually can’t refinance if the loan is hugely upside down. Lenders get nervous. But if you’re only a few thousand underwater and your credit score is above 670, it’s worth a ten-minute phone call. Worst they say is no, and you’re back to Option One.
