How to Refinance a Car Loan

Does the idea of lowering your monthly payments and saving on interest sound appealing to you? It probably does — and one of the ways you can achieve those goals is by refinancing your car loan. How do you refinance a car loan? Like traditional financing, there are a few steps, but the intent is to reduce what you’re already paying. Read on to learn more from our finance team about how to refinance a car loan and the steps involved.

How Do You Refinance a Car Loan?

To start, you need to determine what you’re paying in terms of a monthly payment and interest. Review your loan documents or give your lender a call to get the details. After you have those figures, take the next steps:

• Check Your Credit Score: There’s a good chance your score has gotten higher if you’ve been paying all of your bills on time since you bought your car.
• Submit Applications: Complete refinancing applications and submit them to lenders. Submit the applications within a 14-day timeframe to avoid dings to your credit score.
• Compare Offers: Run the numbers and make sure the offer/offers you receive will actually benefit you. Use our online monthly payment calculator to help you compare offers.
• Choose a Loan Term: Decide if a longer or shorter term loan that best fits your situation. You’ll pay more monthly if you choose a shorter loan term, but you’ll have less interest. The opposite is true for longer a loan term.

The best way to refinance an auto loan depends on your goals and what makes sense for your budget!

What to Know When Refinancing Your Car

If you’re still on the fence about whether you should refinance or not, consider the following points before moving forward:

• Fees: Make sure you won’t incur any fees by paying off your car loan earlier than anticipated. Obviously, you might want to reconsider if that’s the case.
• Underwater Finances: It can be more difficult to get approved for refinancing if you owe more on your car than what’s it worth.
• Older Vehicles: Older cars that have experienced a lot of value depreciation can be a ball and chain if you’re asking for refinancing. A lender may reject your refinance application because your car is simply too old.

Learn More About Your Financing Options at Sawyer Chevrolet, Inc.!

Our expert financiers can give you advice on the best way to refinance your car loan, based on your driving goals and budget. Contact us online or call us at (518) 303-2798 if you have questions about car financing in Catskill. While you’re here, be sure to check out our finance and insurance information hub to learn more about topics like good used-car mileage and selling a car at a dealership.