How to Refinance a Car Loan

man with car documents outside

Wondering, “how do you refinance a car loan?” For those Westlake-area drivers interested in the possible benefits of refinancing, there are many practical ways to improve a credit score over time. While the best way to refinance auto loans around Round Rock involves an improvement of both credit and financial situation, you may still find a more fiscally advantageous loan offer if only one or neither of those is true.

Many still have clear paths to accessing lower payments and better interest rates, despite previous financial hiccups, and learning how to refinance a car loan can make a significant difference for your budget and lifestyle. Learn more with the finance experts at Covert Chrysler Dodge Jeep Ram below!

What to Know When Refinancing Your Car: The Basics

Curious about what to know when refinancing your car? First, it’s important to consider that if your car is older than eight years old, has over 100,000 miles on it, or if you now owe more than the car is worth, you may not qualify for refinancing or save any money with a new loan. Beyond that, you’ll want to determine if refinancing will actually save you money. See below to calculate the possible costs involved:

  • Talk to your lender or consult your agreement to see if you will be charged a prepayment penalty.
  • Consider whether your credit score or financial situation has improved. If neither is the case, you may have less chance of finding a better rate.
  • Plan for the possibility of new lender fees on your next loan,
  • There may be extra associated costs of re-registering or transferring a title if your state requires it.

Sum up the expected total costs of refinancing, then attempt to calculate how much you will ultimately save with your new rate. If you’re not entirely sure if you can afford the start-up cost of refinancing, it’s ok! Learning the best way to refinance an auto loan can be difficult even for the most experienced shopper.

How Do You Refinance a Car Loan?

As you search around Leander for the best way to refinance auto loans, keep in mind these tips below to help you secure your best offer:

  • Shop around. It’s more than likely that your first offer will not be your best. Search widely among lenders and consider in-house financing alongside banks as well.
  • Look closely at your credit report. Your bank and other financial institutions may offer free and accurate credit reports. Look closely at yours for unpaid bills or any errors it might contain, then rectify them to the best of your ability. It may take some time for your credit score to recover, but it will be worth the wait.
  • Pre-qualify or apply for financing. In order to receive the best offers, you’ll need to make multiple financing applications, but getting pre-qualified will help you avoid unnecessary credit checks. “Hard” credit checks, if you must have them, should be limited to one 14-day window to mitigate any negative effects on your credit.
  • Consider alternatives to refinancing. It may be more advantageous to trade-in your current vehicle and use the value in conjunction with a financing offer on your next purchase.

The more familiar you are with your credit history and your current financial situation, the better you’ll be able to tailor how to refinance a car loan to your needs.

Work With Financial Experts at Covert Chrysler Dodge Jeep Ram

Do you have lingering questions about what to know when refinancing your car? Still asking “how do you refinance a car loan?” Contact us or stop by Austin to learn more about the financing process. For more useful car buying tips beyond how to refinance a car loan, get in touch with one of our finance specialists today! Our team of dedicated experts at Covert Chrysler Dodge Jeep Ram are standing by to help you make the right move for your budget and lifestyle.

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