How to Refinance a Car Loan

If you’d like to lower your monthly car payments as well as save on interest then you should look into refinancing your car loan. At the Town North Mazda finance department, we can help you learn the ins and outs of refinancing so you’re ready for when the time comes to act. Find out more today with us then contact the finance team with any questions.

How Do You Refinance a Car Loan?

The goal of refinancing is to lower the interest rate you are being charged each month. That means you need to know what you are currently paying. To do this, either contact your lender or review your documents to confirm your current interest rate and monthly payments. Once you have that information, perform the following steps:

• Check Your Credit Score: If you have been paying all your bills on time since your vehicle was purchased, 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 ensure you get 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: Take time to run the numbers to make sure any new offers coming back will get you the monthly payment you are looking for. Use our online monthly payment calculator to help you compare offers.
• Decide Loan Term: Decide if a longer or shorter term loan 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.

What to Know When Refinancing Your Car

When making the decision to refinance your vehicle or not, you’ll want to also keep the following in mind:

• Fees: You will want to 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 is 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.

If you find yourself in any of these situations, contact the finance center at Town North Mazda. Our experts can give you advice and guide you to options that better fit your circumstances.

Learn About Your Financing Options at Town North Mazda

When you’re ready to start the refinancing process, make your way to Town North Mazda. Our finance experts are standing by to help walk you through the process to get the new monthly payments you’re looking for. Contact us in the meantime with any questions, to find out what happens when a car is repossessed, how to buy a car in another state, or to learn about gap insurance as well as other vehicle tips and tricks.