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How to Refinance a Car Loan

Refinancing your car loan means lowering your monthly car payments and saving on interest. Learn more about how to refinance a car loan with the finance team here at Rolls-Royce Motor Cars Pasadena and you’ll be ready to refinance your car loan, saving more. Check out the ins and outs of refinancing today before you get the process started.

 

 

How Do You Refinance a Car Loan?

The main purpose of refinancing is to lower the monthly interest rate. This means you need to know what you’re currently paying. Review the documentation you have or contact your lender to confirm what your current interest rate and monthly payments are. Once you have this information, follow these steps:

  • Check Your Credit Score: Not sure if you have good credit? If you’ve been making each payment on time since your vehicle was purchased, there’s a good chance your credit score has improved and you can benefit from car loan refinancing.
  • 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’s in your best interest to make sure you run the numbers. You can evaluate different offers to ensure you get near the monthly payment you’ve been looking for. Use our online monthly payment calculator to help you compare offers. 
  • Decide Loan Term: Much like a new loan, you need to decide if a long or short loan term is better for your situation. A shorter term loan will require larger monthly payments, but you will pay less interest in total. With a longer-term loan, your monthly payments will be smaller, but you will pay more in interest in the end.

The best way to refinance an auto loan depends on your financial situation, so be sure to do some research and choose the offer or term that works best for you.

What to Know When Refinancing Your Car

In addition to the above, there are a few other things to keep in mind when looking into refinancing your car. These include:

  • Fees: You will want to check your original car loan to make sure there aren’t any fees associated with paying it off early. If so, refinancing may not be cost-effective. 
  • Underwater Finances: If you owe much more than your vehicle’s currently worth, it can be harder to get approved for refinancing. 
  • Older Vehicles: Many lenders won’t refinance an older car that has already experienced major depreciation. 

If you’re in any of these situations, contact the finance department at Rolls-Royce Motor Cars Pasadena near Los Angeles. Our team can help get you the answers you need on where to go from there and help you find options to better fit your circumstances.

Learn About Your Financing Options at Rolls-Royce Motor Cars Pasadena

Contact us today to learn more about car loan refinancing options, browse more car-buying tips, and more! We look forward to helping you get the loan or lease that works for you.

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