How to Refinance a Car Loan

Do you want to lower your monthly car payments and save on interest? If that’s the case, then refinancing your car loan is the best option. Yet, some of the most common questions you might have include, “How do you refinance a car loan?” and “What’s the best way to refinance an auto loan?”

Over the years, the Ray Dennison Buick GMC finance staff has been helping explain to Peoria drivers what to know when refinancing your car. Learn about the best ways to refinance auto loans below, and don’t forget to reach out with any additional questions.

How Do You Refinance a Car Loan?

So, how to refinance a car loan around Morton? When you’re refinancing, the goal is to lower the interest rate you’re being charged every month. This means you need to know what you’re paying. Review all your documents, or contact your lender, to confirm your current interest rate and monthly payments. Once you have that information, complete the following steps: 

• Check Your Credit Score: If you’ve been paying all your bills on time since the vehicle was purchased, there’s a great chance your credit score has improved, and you’ll be able to benefit from refinancing. 
• Start Applying: Reach out to multiple automotive refinance companies in the Bloomington area to ensure you get the best rate. Make sure to submit every application 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 the monthly payment you’re looking for. Use our online monthly payment calculator to help compare offers. 
• Decide Your Loan Term: Decide if you want a shorter or long-term loan that best works for your situation. Short-term loans require larger monthly payments, but pay less interest in total. By contrast, longer-term loans will have smaller monthly payments, but you will pay more interest.

Remember that the best way to refinance your auto loan depends on your circumstances. Make sure that the offer and terms you choose work well for you.

What to Know When Refinancing Your Car

Now that you know how to refinance a car loan, there are a few additional things you should keep in mind during this process: 

• Fees: You want to check your original car loan to make sure there are no fees associated with paying it off early. If there are any, refinancing isn’t the best option.
• Underwater Finances: If you owe more than your vehicle is currently worth, it’s harder to get approved for refinancing.
• Older Vehicles: Many lenders will not refinance an older model that’s already experienced major depreciation. 

Learn About Your Financing Options at Ray Dennison Buick GMC

Now that you know the best way to refinance auto loans and the answer to “How do you refinance a car loan?” turn to Ray Dennison Buick GMC! Whether it’s refinancing or applying for the first time, we’re here to sort everything out for our Peoria customers. Learn all about your financing options and what to know when refinancing your car at Ray Dennison Buick GMC in Pekin today!