How to Refinance a Car Loan

refinancing a car

Do you want to lower your monthly car payments and save money on interest, but aren’t sure how to proceed? Refinancing your car loan isn’t as difficult as you think! The Santa Cruz Chrysler Dodge Jeep Ram finance center near Watsonville is happy to help advise you on the process. Read below to determine if refinancing your auto loan is the right choice for you.

How Do You Refinance a Car Loan?

Why refinance? To save money. Specifically, the goal of refinancing is to lower the interest rate you are being charged each month. To do that, you should figure out what you’re currently paying. Review your auto loan documents or contact your lender to confirm your current interest rate and what your current monthly payments are. Once you have all of your ducks in a row, follow these steps:

  • Check Your Credit Score: If you have been paying all your bills on time since your vehicle was purchased, there is a good chance your credit score has improved. With a higher credit score, you will likely benefit from 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: Run the numbers to make sure new offers will get you the monthly payment you are looking for. Our monthly payment calculator is really handy during this part of the process.
  • Decide Loan Term: Decide if a longer or shorter term loan fits best fits your situation. A shorter term loan will require larger monthly payments, but you will pay less total interest over time. With a longer-term loan, your monthly payments will be smaller, but you will pay more in interest overall.

The best way to refinance an auto loan depends on your circumstances, ensure any offers fit your specific situation.

What to Know When Refinancing Your Car

What should you watch out for when you’re refinancing an auto loan for your Scotts Valley vehicle? Look out for these things:

  • 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 fees, refinancing may not be cost effective.
  • Underwater Finances: If you owe much more than your vehicle’s currently worth, getting new financing approved may be harder.
  • Older Vehicles: With that said, many lenders won’t refinance an older car that has already experienced major depreciation.

In one of these situations? Don’t give up hope! The experts in the finance center at Santa Cruz Chrysler Dodge Jeep Ram near Capitola can give you advice and find a better fit for you.

Learn About Your Financing Options at Santa Cruz Chrysler Dodge Jeep Ram

If you have additional questions about financing, refinancing, improving your credit score, leasing, or any other financial aspects of purchasing or owning a car, truck, or SUV, contact us to speak to someone today!

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