How Do You Refinance a Car Loan?

Has your credit score improved since you first took out your car loan? Maybe you just need to lower some payments. Then you might be thinking about how to refinance a car loan. But, how do you refinance a car loan? Our finance department has helped lots of Central IL drivers with the same question, so let’s discuss the best way to refinance an auto loan and what to know when refinancing your car below!

How Do You Refinance a Car Loan for Lower Payments?

Interest rates tend to go up and down, as do our credit scores sometimes. That means, like many drivers, you may feel it’s a good time to refinance your car loan. So, how do you refinance a car loan? The best way to refinance an auto loan starts with a little homework and an understanding of your own financial situation.

The Best Way to Refinance an Auto Loan:

1. Pull your credit report, and fix any issues that are negatively impacting your credit.
2. Figure out what your monthly payment should be. Our car payment calculator can help with that.
3. Get pre-approved. We can help with that as well.
4. Shop around for the best rate. Applying to only one lender is not the best way to refinance an auto loan. Fortunately, our finance department knows how to refinance a loan by dealing with multiple lenders. What’s more, we’re able to leverage our relationships with those lenders to get our customers the best rates.

What to Know When Refinancing Your Car

Some drivers have been caught off-guard by some of the downsides of refinancing an auto loan. We want you to be prepared, so here’s a list of things to know beforehand:

What to Know When Refinancing Your Car:

• You will probably only get a better rate if your credit score has improved.
• Your old lender may charge a prepayment penalty.
• Your new lender will likely charge fees on your new loan.
• Some states will require you to re-register or transfer the title of your car (more costs).
• You may not save money or qualify for a new loan if your car is older than eight years, has over 100,000 miles on it, or you now owe more than the car is worth.

Talk to the Finance Department at Sam Leman Automotive Group

Navigating the ins and outs of car loans can be confusing. But that’s why we’re here. Talk to our finance department about your options. They’ll be glad to assist you. And, if you found this guide to be helpful, check out our posts on identifying a good interest rate for a car loan and how to finance with no credit. Why not visit one of our convenient locations, like the one in . We’ll be happy to help.