How to Refinance a Car Loan

Are you wondering, “How to refinance a car loan?” The best way to refinance an auto loan is by evaluating your financial situation to see if you’re likely to get lower monthly payments by doing so and applying to several different lenders for a competitive edge. Bettenhausen Automotive’s finance team can help you determine if you’re a good fit for car loan refinancing. Here’s what to you when refinancing your car in Orland Park:

How Do You Refinance a Car Loan?

Tinley Park area drivers refinance a car loan if they have a better credit score than they had when they took the loan out. Refinancing with a better credit score will lead to lower monthly payments and interest rates. Before you decide to learn how to refinance a car loan, you’ll need to know how much you are paying now in monthly payments and interest rates. Once you review your documents, contact the dealership or lender where you took out a car loan and verify how much you are paying. After verifying how much you’re paying, follow the steps below: 

• Perform a Credit Check: Making payments on time improves your credit score. If you’ve paid on time every month your credit score is probably high enough for you to benefit from refinancing your car loan. 
• Start Applying: Apply to several auto lenders to maximize your competitive advantage and get the best offer. 
• Evaluate Offers: Compare your offers to make sure you’re getting the lower monthly payments and interest rates you want. Our payment calculator can help you get a more accurate estimate. 
• Short or Long Loan Term: Decide which loan term you want. Shorter loan terms require larger monthly payments but you’ll pay less interest overall. 

The best way to refinance a car loan depends on your financial situation.

What to Know When Refinancing Your Car

There are several things you should consider before deciding to refinance a car loan. Refinancing can be beneficial, but there are some circumstances that make it impractical. 

• Fees: Check your paperwork for fees associated with paying your car off early. If there are fees you’ll incur by refinancing, it may not save you money to go through with it. 
• Underwater Finances: If you owe more in interest than your car is worth, lenders will likely decline your refinance application. 
• Older Vehicles: Older cars are less likely to get approved for refinancing due to their depreciated value. 

Learn About Refinancing at Bettenhausen Automotive 

Contact our finance team near New Lenox today to learn if refinancing your auto loan is a good option for you. Is your credit score not high enough yet to refinance? Learn how to raise your credit score with our car buying tips.