How to Refinance a Car Loan

2022 RAM 1500 towing an ATV through large puddle

 

Everyone loves the idea of lowering their monthly car payments and saving on interest as well. Refinancing can be a great way to save money on your car loan. At Old Saybrook Chrysler Dodge Jeep RAM in Old Saybrook, our finance team is staffed with experts who can give you the scoop on how to navigate the process. Below, you can learn more about the best way to refinance an auto loan and learn more about your options. 

How Do You Refinance a Car Loan?

Lowering the interest rate on a car loan is the goal behind refinancing. To refinance, you’ll need to know the ins and outs of your current loan — how much you’re paying, your interest rate, and more. Check your loan documents or give your lender a call to get the information you need. Once you have it, take these steps:

  • Review Your Credit Score: Make sure your credit is in good shape. Take care of anything in collections, and get current on your bills to ensure you make a good impression on the lender. 
  • Applying for Loans: Complete applications with different auto refinancing companies to make sure you get the best possible rate. Submit your applications within a 14-day window to prevent repeated damage to your credit score. 
  • Compare Offers: Evaluate the offers you receive to see which makes the most sense for you. Use our online monthly payment calculator to help you. 
  • Settle on a Loan Term: Decide if a longer or shorter term loan that best fits your situation. Do you want a longer or shorter loan term? A longer term will result in lower monthly payments but higher interest rates, whereas a shorter term will result in higher monthly payments and lower interest. 

What to Know When Refinancing Your Car

Still on the fence about where you want to refinance your car? Consider the following points before making your decision: 

  • Associated Fees: Check your auto loan to ensure there are no fees for paying it off early. If so, refinancing might not be the best option. 
  • Underwater Finances: If you owe more on your car than what it’s worth, you’ll likely have a harder time getting approved for refinancing. 
  • Older Vehicles: In many cases, lenders won’t refinance an older vehicle that has already taken a significant depreciation hit. 

Contact the finance center at Old Saybrook Chrysler Dodge Jeep RAM if you’re in any of the situations described above. Our team can give you advice, based on your circumstances. 

Learn About Your Financing Options at Old Saybrook Chrysler Dodge Jeep RAM

Now that you know the answer to the question, “How do you refinance a car loan,” you’re ready to decide if it’s the right option for you. If you’re currently looking to lease or finance a car, we can help! Contact us online or give us a call at (860) 851-4812 to schedule an appointment at our Old Saybrook dealership. 

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