How to Refinance a Car Loan

Interested in lowering your monthly car payments in Lakeland and saving on interest? Most drivers are! If you’re one of them, refinancing your car loan might be your best option. If you’re unsure how to refinance a car loan, Chevrolet Center Inc has the information you’re looking for. Here, our friendly finance team discusses the ins and outs of refinancing an auto loan. 

How Do You Refinance a Car Loan?

When you refinance your car loan, the main goal is to lower the interest rate you’re being charged each month, meaning you’ll need to know what you’re currently paying. Review your documents on your own or get in touch with your lender to confirm your monthly payments and interest rate. Once you have these numbers, you’ll perform the following steps:

• Check Your Credit Score: Have you been diligent about paying your bills on time since purchasing your vehicle? There’s a good chance your credit score has improved over time, and refinancing could be a great possibility.
• Start Applying: Apply to several automotive refinance companies to ensure you get the best rate. Make sure you submit all applications within a 14-day period to minimize the negative impact on your credit score.
• Evaluate Offers: It may seem like tedious work, but you should still run the numbers to ensure any new offers coming your way are going to secure the new monthly payment you desire. Need help comparing offers? Use our handy monthly payment calculator.
• Decide On a Loan Term: Will a long or short-term loan suit your unique financial situation best? Shorter-term loans require larger monthly payments, but you’ll pay less total interest in the end. Longer-term loans, on the other hand, make your monthly payments smaller, but incur more total interest when all is said and done.

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

What to Know When Refinancing Your Car

In addition to what we discussed above, you should keep the following factors in mind as you decide whether or not to refinance your car:

• Fees: Check your original car loan to ensure there won’t be any fees associated with paying it off early. If this is the case, refinancing might not be the most cost-effective option.
• Underwater Finances: Do you owe significantly more than your vehicle is currently worth? This can make it harder to get approved for refinancing.
• Older Vehicles: Many lenders won’t consider refinancing an older vehicle that has already gone through significant depreciation.

Get Answers to More Auto Loan FAQs From Chevrolet Center Inc

Have lingering questions about your car loan? Curious about what your options are? Contact us to schedule an appointment with our finance professionals. We’re not far from Davenport, and we’re always happy to help!