How to Refinance a Car Loan

Are you looking for a way to lower your monthly car payments and save on interest? You may want to consider refinancing your car loan. In this guide from the finance team at INFINITI of Warwick, we’ll take a look at how to refinance a car loan and fill you in on what to know when refinancing your car so you can get the best deal possible. If you have any questions along the way, please feel free to contact us.

How Do You Refinance a Car Loan?

Refinancing is a great way to lower the interest rate you are being charged each month. So, how do you refinance a car loan? The best way to refinance a car loan is to first review your documents or contact your Providence-area lender to confirm your current interest rate and monthly payments. Once you have that information, follow these steps:

• Check Your Credit Score: Have you been paying all your bills on time since your vehicle was purchased? If so, there is a good chance your credit score has improved and you could benefit from refinancing. 
• Start Applying: Apply to several automotive refinance companies to find 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: It is important to run the numbers in order to make sure that you get the monthly payment that is the best fit with your Coventry-area budget. 
• Decide Loan Term: Decide if a longer or shorter term loan that best fits your situation. A shorter 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 pay more in interest in the end. 

The best way to refinance an auto loan depends on your circumstances, so make sure that the offer and term length you choose works for your situation. 

What to Know When Refinancing Your Car

There are a few other things to keep in mind when you are determining whether or not to refinance. Here’s what to know when refinancing your car:

• Fees: Check your original car loan to make sure there aren’t any fees associated with paying it off early. If there are, refinancing may not be cost-effective. 
• Underwater Finances: If you owe much more than your vehicle’s currently worth, it can be harder to get approved for refinancing. 
• Older Vehicles: Many lenders won’t refinance an older car that has already experienced major depreciation. 

Learn More About Your Refinancing Options at INFINITI of Warwick

You can count on the finance experts at INFINITI of Warwick to help you choose the best way to refinance an auto loan. Our team will work with you to secure the term and rates that are the best fit with your budget. We also offer a variety of financing options that can help Cranston-area drivers like you protect your investment. If you have any further questions or would like more information, give us a call at (401) 244-4436.