How to Refinance a Car Loan

Hand Punching Numbers on Calculator

If you recently bought a new car and want to lower your monthly car payments as well as save on interest, you may want to consider refinancing your car loan. At Sam Leman Automotive Group, we have all of the details on refinancing, so you know if this is the right decision for you and your budget. 

How Do You Refinance a Car Loan?

One of the main benefits of refinancing is to lower your monthly payment rate. Because of this, you need to be familiar with what your current payments are. Review your vehicle paperwork or ask your lender about this information. After you have everything figured out, follow the steps listed below:

  • Check Your Credit Score: If you have consistently paid your bills on time from the date you bought your vehicle, it is likely that you have a better credit score than you did at the time. If so, you may want to take advantage of 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: Carefully review all of your offers before making a final decision. 
  • Decide Loan Term: Decide if a longer or shorter-term loan fits best fits your situation. You will have larger monthly payments if you opt for a short term loan, however, the benefit is that you will end up paying less in interest. With a longer-term loan, you pay more in interest but have the benefit of lower monthly payments. 

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

What to Know When Refinancing Your Car

If you are trying to decide whether refinancing is right for you, there are a couple of factors you will want to keep in mind. 

  • 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 there are, it may not be a good idea to refinance.
  • Underwater Finances: If you owe much more than your vehicle’s currently worth, it may be more difficult to get approved for refinancing. 
  • Older Vehicles: If you drive an older car that has depreciated significantly, it is likely that most lenders will not refinance it. 

If you find yourself in any of these situations, contact the finance center at Sam Leman Automotive Group for advice.

Hands Covering Car

Learn About Your Financing Options at Sam Leman Automotive Group

For more information about refinancing your car or what your other options may be, consult the experts at Sam Leman Automotive Group. We want to make your vehicle as affordable as possible.

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• Bloomington, Morton, Peoria, IL

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Sam Leman Automotive Group

Bloomington, Morton, Peoria, IL

40.4607752 -88.9687249
Sam Leman Automotive Group 40.4607752, -88.9687249.