How to Refinance a Car Loan

Learn what to know when refinancing your car and how to refinance a car loan when you’re on the lookout for a better rate. We’ll take a look at the ins and outs of how to refinance a car loan in Merriam!

How Do You Refinance a Car Loan?

Refinancing lets Overland Park and Wichita drivers lower their monthly payments on their auto loan by lowering the interest rate. You’ll need to know your current rate with your current lender and your monthly payment. Once you have that information, here’s generally the best way to refinance your auto loan:

• Check Your Credit Score: Being on time with your auto loan will most likely improve your credit score, and many drivers that start with a less-than-ideal interest rate can very often find a better rate once they’ve been consistently paying off their loan each month.
• Start Applying: Apply to more than one automotive refinancing company to compare rates. It’s best to apply to all of your chosen options within 14 days to minimize the impact on your credit score. You’ll notice a temporary decrease in your credit score when applying to multiple lenders because each lender is generally doing a hard check on your credit. These appear on your credit score, but they generally drop off in two or three years. 
• Evaluate Offers: Compare each offer that you’re given and determine which is right for you. Payment calculators can help with this to give you a general idea of what to expect.
• Decide the Loan Term: There are shorter and longer-term loans, and shorter terms will require larger amounts each month with the benefit of paying less in interest.

The very best way to refinance an auto loan can vary based on your specific needs, but we generally recommend aiming for a lower interest rate that will allow you to pay off your loan each month to continue to improve your credit while paying down interest.

What to Know When Refinancing Your Car

• Fees: Check your original car loan to make sure there aren’t any fees associated with paying it off early. Refinancing may not be cost-effective if that’s the case. 
• Owing More on Your Vehicle: If you owe a larger amount that’s more than what 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. 

Our financing center can help Kansas City drivers through their options if they find themselves in these positions. We can answer any of your questions and help you find a solution that works.

Learn More About Your Financing Options at Aristocrat Motors

Contact our financing team today to learn more about your options, whether you’re applying for a new loan or looking to refinance. We’re ready to help you get the best rate available on your vehicle.