How to Refinance a Car Loan

Signing Finance Documents for Car

 

If you have a car loan, you’re probably interested in knowing how to refinance a car loan to lower your payments. Knowing the best way to refinance your auto loan is one of the greatest ways to save you money, and make sure that you’re taking advantage of the improvements to your credit score. Christi Hubler Chevrolet is ready to cover the ins and outs of the process, so you can decide the best way to refinance your auto loan today. Learn more about what to know when financing your car near Lafayette today.

How Do You Refinance a Car Loan?

The goal of refinancing is to obviously lower the interest rate that you are being charged each month. To start doing this, you need to review your documents or contact your lender to confirm your current interest rate as well as your monthly payments. Once you have that information, you can then begin the process by following these steps:

  • Check Your Credit Score: Paying your bills on time each month is a great way to improve your credit, and you likely don’t even realize it. Check your credit score, to see if you could benefit from refinancing.
  • Start Applying: Apply to several refinancing companies to ensure that you’re getting the best rate. You do not have to take the first offer, however, make sure to make all of your applications within the same 14-day period, to minimize the negative impact on your credit score.
  • Evaluate Offers: Use a monthly payment calculator to run the numbers, and make sure that the offer you are getting brings you down to a monthly payment that you are happy with.
  • Decide Loan Term: You also need to decide on if a longer or shorter-term loan benefits you the most. Short-term loans require larger payments, but you will pay less in interest. Longer-term loans are the opposite, with smaller monthly payments, but you’ll be paying more in the end.

The best way to refinance an auto loan depends on your circumstances, so make sure that any offer or term you choose works for your situation.

What to Know When Refinancing Your Car

There are a few other things to keep in mind while you’re learning how to refinance your car loan around Brownsburg. These include:

  • Fees: You will want to check your original car loan to make sure there aren’t any fees associated with paying it off early. While not too common, if there are, refinancing may not be cost-effective.
  • Underwater Finances: If you owe much more than your vehicle’s currently worth, it can be harder to get approved for refinancing.
  • Older Vehicles: Many lenders won’t refinance an older car that has already experienced major depreciation. This typically applies to cars over 3 or more years old, so you should check to make sure you can refinance.

Any questions about your situation, or other tips, you can always talk to our finance department who will be ready to help you through the refinancing process.

Learn About Your Financing Options at Christi Hubler Chevrolet

Our expert team in the finance department are ready to help by sharing everything that they know about refinancing to Danville drivers. If you have any questions, don’t hesitate to contact us!

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