How to Refinance a Car Loan

If you’re interested in lowering your monthly car payments while saving on interest, you may be wondering the best way to refinance an auto loan. At Auffenberg Ford South Belleville, we’re covering the ins and outs of what to know when you’re refinancing your car, so you have all of the information needed. Don’t hesitate to contact our finance department if you have any questions.

How Do You Refinance a Car Loan?

What is the best way to refinance an auto loan? Keep in mind that your goal is to lower your interest rate, so you’ll need to know what you’re currently paying. Look over your documents and confirm your monthly payment and interest rate with your lender. With that information, follow these steps:

• Check Your Credit Score: Paying your bills on time since the car was purchased enhances your chances of refinancing your loan.
• Start Applying: Apply to multiple automotive refinance companies to make sure that you’re getting the best rate possible. Be sure to submit all of the applications within 14 days to lower the negative impact on your credit score.
• Evaluate Offers: Review your offers and run all of the numbers to ensure that you’re getting the monthly payment that you’re looking for. Take advantage of our online monthly payment calculator to help compare offers.
• Decide Loan Term: Choose whether a short or long-term loan is better for your situation. Short-term loans require larger monthly payments while long-term loans mean lower monthly payments, but you’ll pay more in interest in the end.

What to Know When Refinancing Your Car?

There are additional things to consider when you’re deciding whether or not to refinance your car:

• Fees: Check your original car loan to see if there are any fees associated with paying off the loan early. If there are, refinancing may not be cost-effective.
• Underwater Finances: If you owe much more than what the vehicle’s worth, getting approved for refinancing can be harder.
• Older Vehicles: Some lenders won’t refinance an older vehicle that’s already experienced significant depreciation.

Learn About Your Financing Options Today!

At Auffenberg Ford South Belleville, we work hard to make your financing experience as efficient and stress-free as possible. For additional advice or if you have any questions, don’t hesitate to reach out to us.