How to Refinance a Car Loan

Want to lower your monthly car payments and save on interest? If this sounds like you, then refinancing your car loan can be the best option. One of the most common questions we’ve received at Smith Chevrolet Of Turlock near Los Banos is, “How do you refinance a car loan?” If you are looking for the best way to refinance an auto loan, we can help. Below, we’ve put together a guide on how to handle this process and what refinancing entails. 

How Do You Refinance a Car Loan?

So, how to refinance a car loan near Modesto? The primary goal of refinancing is to lower the interest rate you are charged each month. To begin with, you need to know what you are currently paying. Review your documents to confirm your current interest rate and monthly payments. Once this is determined, take the following steps:

• Check Your Credit Score: If you have been paying all your bills on time since your vehicle was purchased, there’s a good chance your credit score has improved and you might be able to benefit from refinancing.
• Start Applying: Apply to multiple automotive refinance companies to ensure that you are getting the best rate. Make sure you submit all applications within 14 days to minimize the negative impact on your credit score. 
• Evaluate Offers: Take time to run your numbers to make sure any new offers coming back will provide you with the monthly payment you are looking for. Use our payment calculator to compare your offers. 
• Decide Loan Term: Decide if a longer or shorter-term loan is best for your existing budget and situation. A short-term loan will require larger monthly payments, but you will pay less interest in total. With a longer-term loan, your monthly payments will be smaller, but you will end up paying more in interest overall. 

The best way to refinance auto loans depends on your circumstances, so be sure that any offer or term you select works for your existing situation. 

What to Know When Refinancing Your Car

As we move through how to refinance a car loan, there are some other things you need to consider when you are deciding on whether to refinance your car:

• Fees: You’ll want to check your original car loan to make sure there aren’t any fees for paying it off early. If there are, refinancing may not be the most cost-effective option. 
• Underwater Finances: For those who owe more money on your vehicle than it’s currently worth, it may be harder to get approved for refinancing. 
• Older Vehicles: Most lenders won’t refinance an older car that has already undergone major depreciation. 

If any of these circumstances are present, contact the Smith Chevrolet Of Turlock finance center. Our staff can give you advice and showcase options that better meet your current circumstances. 

Learn About Your Car Financing Options in Turlock at Smith Chevrolet Of Turlock

Now that you know how to refinance a car loan, turn to Smith Chevrolet Of Turlock for all your car financing needs. Our finance team has seen everything and can answer questions ranging from how to buy or lease to whether certified pre-owned cars are worth it. No matter what car financing advice you need around Modesto, Smith Chevrolet Of Turlock is here to help.