How to Refinance a Car Loan

If you are looking for a way to cut down your monthly car payments and save on interest over time, we encourage you to think about refinancing your auto loan. At Land Rover Santa Monica, we cover the best way to refinance an auto loan so you’re armed with all the information you need. How do you refinance a car loan? We share the important steps below.

How Do You Refinance a Car Loan?

The goal of refinancing is to lower your monthly interest rate. So, before you can begin the refinancing process, you need to find out what you are currently paying. Take a look at your financing documents or contact your lender to confirm your current interest rate and monthly payments. When you have all of the details, follow these simple steps.

• Check Your Credit Score: If you have been consistently paying your bills from the time you took out your car loan, there is a good chance your credit score has improved. If this is the case, you could be a great candidate for refinancing.
• Start Applying: To know you are getting the best possible rate in Los Angeles and Marina Del Rey, apply to several automotive refinance companies. All applications should be submitted within a 14-day period to minimize any negative impact on your credit score.
• Evaluate Offers: Thoroughly review all offers you receive before making a final decision.
• Decide Loan Term: Choose the loan term that works best for your needs. If you opt for a shorter-term loan, you’ll have higher monthly payments but will be spending less overall in interest. A longer-term loan has lower monthly payments, but you end up paying more in interest.

What to Know When Refinancing Your Car

Now that you know the best way to refinance an auto loan, there are a few factors to keep in mind to ensure it’s the right choice for you. Here’s what to know when refinancing your car.

• Fees: Does your initial auto loan charge a fee for paying the loan off early? Some do, which could make refinancing less cost-effective.
• Underwater Finances: If you owe significantly more than the current value of your car, you may not be approved for refinancing.
• Older Vehicles: Some lenders do not offer refinancing on an older car that has already experienced significant depreciation.

Explore Your Financing Options at Land Rover Santa Monica

How do you refinance a car? All you have to do is follow the steps provided above. If you have any questions about the best way to refinance an auto loan in the Malibu area, do not hesitate to reach out to us for more information. You can also continue your research.