How to Refinance a Car Loan

When refinancing, your goal is to receive a lower interest rate. Start by confirming your current rate, either on your payment statements or directly through your lender. Once you know where you’re at, work through the following steps:

• Check Your Credit Score: Your credit score will play a big role in whether or not you can achieve a lower rate. Since you’ve already been paying for your car on a monthly basis, your score may have improved.
• Start Applying: Credit score in hand, start applying to automotive refinance companies, comparing the various rates. Be sure to submit all applications within a 14-day period though, or else you may see negative hits to your credit score.
• Evaluate Offers: Use a monthly payment calculator to see which offer will benefit you most, taking into account the term length as well. Even the smallest fluctuations in rates can make a big difference in your payment.
• Decide Loan Term: In addition to your interest rate, evaluate how the loan term will impact your budget. A longer term will afford you smaller monthly payments, but you’ll pay more interest over time, while a shorter term will see larger monthly payments, but less interest in total.

Anytime you take on a financial commitment in Temple, it’s important to ensure it fits comfortably within your budget. Be realistic about what you can afford, and how long you’ll be responsible for these payments. Borrowing within your limits will improve your credit score over time, so choose responsibly.