How to Refinance a Car Loan

How Do You Refinance a Car Loan?

When refinancing your car loan, the main goal is to lower your monthly interest rate, which impacts the total due for each payment. Before you start, make sure you know your current interest rate by either checking your payment statements or contacting your lender directly. Once you have that information, use the following steps: 

• Check Your Credit Score: Your credit score will have the most significant impact on available interest rates. Has yours changed since you started your loan? Chances are if you’ve stayed up to date on your vehicle payments, your score may have increased, making refinancing an even better move.
• Start Applying: Research multiple lender options to ensure you receive the best possible rate, submitting applications to all within the same 14 day period. Making too many inquiries too far apart could impact your credit score, so time accordingly. 
• Evaluate Offers: Use a monthly payment calculator to understand how any new rates will affect your payments. Even small changes in interest percentage can make a big difference in the total. 
• Decide Loan Term: Along with the interest rate, play around with loan terms. Longer-term loans will give you a smaller monthly payment, but you’ll be paying more interest over time. Shorter-term loans may be higher, but you’ll pay them off faster with less interest. 

With any financial commitment, it’s important to only take on what you can reasonably manage, so when you refinance an auto loan, be confident it fits your circumstances. 

What to Know When Refinancing Your Car

In addition to interest rates and loan terms, here are some additional factors that may impact your decision to refinance your car: 

• Fees: Refinancing may not be cost-effective if your original car loan charges fees for early pay off. Contact your lender if you aren’t sure. 
• Older Vehicles: If your model has greatly depreciated since purchase, many lenders may not extend refinancing options. 
• Underwater Finances: Owing more than what your vehicle is currently worth may present challenges in refinancing approval. 

Not sure if any of these situations apply to you? Don’t let the unknown hold you back from a great deal; work with the friendly finance team at Nyle Maxwell Chrysler Dodge Jeep Ram! We’re here to guide you through the process and answer all your refinancing questions. 

Learn About Your Financing Options at Nyle Maxwell Chrysler Dodge Jeep Ram

Ready to refinance your car in Cedar Park? We’re ready to help! Use our car buying tips to make savvy, informed decisions, and save money on the Chrysler, Dodge, Jeep, Ram car you love! Contact us today!