How to Refinance a Car Loan

How Do You Refinance a Car Loan?

How do you refinance a car loan? The best way to refinance an auto loan is to get a lower interest rate than you currently have. So you’ll need to find your current interest rate, apply broadly, and then find the best offer for you. Here is a brief overview of what to expect when applying in Morristown or Kingsport:

• Check Your Credit Score: When was the last time you checked your credit score? Many Greeneville drivers are pleased to learn that their credit score has improved over the duration of their loan. If this is the case for you, then there’s never been a better time to learn how to refinance a car loan.
• Start Applying: Apply to several automotive refinance companies, but be sure to submit all applications within a 14-day period. This will prevent dings against your credit score.
• Evaluate Offers: Now that you have offers in hand, it’s time to crunch the numbers. What if math isn’t your strong suit? Feel free to use our payment calculator to quickly compare your offers side by side.
• Decide Loan Term: This is also a good time to consider the length of your loan. Longer loans involve lower monthly payments, but more interest paid over time. Shorter loans mean higher monthly payments, but less interest overall.

What to Know When Refinancing Your Car

We’ve gone through the basics of “How do you refinance a car loan?” But, there are some extra factors to weigh when you’re making your final decision:

• Fees: Check the fine print of your original car loan. Some lenders charge a fee if you try to pay off the loan early. If that’s the case for you, redo your calculations to see if refinancing is still worthwhile.
• Underwater Finances: If you have negative equity, you owe much more than your vehicle’s currently worth. This is called being underwater or upside down on your loan, and it makes it more difficult to get approved for refinancing.
• Older Vehicles: Very old vehicles can be more difficult to refinance because they have already experienced the bulk of their depreciation.