How to Refinance a Car Loan

Are you interested in lowering your monthly car payments and saving on interest? Then refinancing your car loan may be your best bet. At Advantage Toyota of River Oaks, we cover the ins and outs of refinancing so you’re armed with all the information you need. Read on to learn how to refinance a car loan in Chicago!

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. Review your documents or contact your lender 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 that 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. 

The best way to refinance auto loan depends on your circumstances, so make sure that any offer or term you choose works for your situation.

What to Know When Refinancing Your Car

There are a few other things to keep in mind when you are making the decision whether or not to refinance your car:

• 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’s 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 Advantage Toyota of River Oaks. Our experts can give you advice and guide you to options that better fit your circumstances. 

Learn About Your Financing Options at Advantage Toyota of River Oaks

Our finance experts are waiting to share what you need to know when refinancing your car. If you have additional questions, contact us to speak with someone today!