How to Refinance a Car Loan

Are you looking to lower your monthly car payment in Vancouver and save on overall interest costs? You may be a candidate for refinancing your vehicle. How do you refinance a car loan? In the guide below, we show you how to refinance a car loan as well as what to know when refinancing your car. If you have any questions before you begin the process, reach out to us for more information. 

The Best Way to Refinance an Auto Loan

How do you refinance a car loan? The goal of refinancing is to lower the interest rate you are being charged each month. First things first, you need to know what you are currently paying. Take a look at your loan documents or give your lender a call for this information. After you have an idea of what you are currently paying, follow the guide below. 

• Check Your Credit Score: Have you been on time with all of your bills since you purchased your vehicle? If so, your credit score has likely experienced a boost. If this is the case, you could be a great candidate for refinancing. 
• Start Applying: Apply to several automotive refinance companies to ensure you get the best rate. Remember: All applications should be submitted within a 14 day period to minimize the negative impact on your credit score.
• Evaluate Offers: Be sure to thoroughly review each offer you are given before making a decision. 
• Decide on the Loan Term: Do you prefer a shorter loan term or longer loan term? Each option has its pros and cons. Shorter loan terms have a higher monthly payment, but you end up paying less in interest. Longer term loans have lower monthly payments, but because it takes longer to pay off the loan, you are charged more in interest over the course of the loan. 

What to Know When Refinancing Your Car

Before you refinance your car, there are a few things yo be aware of: 

• Fees: Some car loan terms charge you for paying the loan off early. If that is the case for you, it may not be cost-effective to refinance your vehicle. 
• Underwater Finances: Do you owe more on the vehicle than what it is currently worth? Being “underwater” on your loan can make it quite challenging to refinance.
• Older Vehicles: Some lenders will not refinance an older car because it has already experienced major depreciation. 

If you find yourself in any of these situations, do not hesitate to reach out to us so that we can help you explore your options.

Contact Lexus of Portland for More Information

Our finance experts are more than willing to share what you need to know when refinancing your car. We understand if you have questions about refinancing, and we are here to address them. Contact us today or check out our car financing tips.