How to Refinance a Car Loan

Car keys and a credit card on top of a signed car loan

Have you been wondering how you can lower your monthly car payments by reducing the interest rate on your auto loan? If so, refinancing your car loan is a great option for your Farmington Hills drives. Below, our dedicated finance team at Fred Lavery Porsche Company covers how to refinance a car loan. Read on to learn more about the steps involved in learning how to refinance a car loan.

Refinancing a Car Loan: Step by Step

So how do you refinance a car loan? When you want to lower the interest rate you’re paying, the best way to refinance your auto loan can depend on several factors. Be sure to confirm your loan rate and monthly payment amount with your lender before moving forward. So, how do you refinance a car loan? Follow the steps below:

  • Check Your Credit Score: Has your credit score fluctuated since you first took on your loan? If so, your credit may have improved. Refinancing could be a beneficial choice for you.
  • Submit Applications: Start submitting loan applications to different automotive refinance companies or your credit union when you’re ready. Schedule your application submissions within a 14-day window to help minimize the hard inquiry effects on your credit score
  • Review Offers: You can choose between several lenders, so be sure to consider the one that benefits you the most.
  • Choose a Loan Term: You’ll need to decide on a short or long term for your loan. With a short-term loan, you can expect to pay more monthly, but less in total. With a long-term loan, your monthly payments will be smaller, but you’ll pay more in interest.

The right refinancing terms for you will likely differ from another driver’s — and that’s okay. Make sure you’re choosing the best offer and terms for your situation.

What to Know When Refinancing Your Car

If you’re deciding whether to refinance your car, be sure to consider the following points before taking action:

  • Fees: Some automotive loan companies charge fees for early repayment. If that’s the case with your loan company, refinancing may not be the best option for you.
  • Underwater Finances: Do you owe more on your car than what it’s worth? If so, you’ll likely finder it harder to get approved for refinancing.
  • Older Vehicles: Some lenders don’t refinance older cars that have already depreciated in value.

Do you have any questions about how you can get around these issues? Don’t hesitate to ask by calling at (248) 645-5930.

Explore Your Financing Options at Fred Lavery Porsche Company

Are you ready to refinance your auto loan? Don’t hesitate to contact us to speak with one of our finance experts, and we’ll provide more information on the best way to refinance an auto loan. We’re always ready to help you stay happy inside your Porsche and with your payments.

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