How to Refinance a Car Loan

If you’re currently financing a vehicle in the Fort Hood area and you’re interested in lowering your monthly payments, consider refinancing your car! Depending on your credit score, you might be able to significantly lower the interest rate or payments on your vehicle. If you’re wondering how to refinance your car, it’s generally pretty straightforward as long as you have the right information. The finance team at Nyle Maxwell CDJR Killeen has put together a guide outlining what to know when refinancing a car loan, so you can be as informed as possible before making a decision.

How Do You Refinance a Car Loan?

The first thing you’ll want to do is review your current finance documents to find out exactly what you’re currently paying in terms of monthly payments and interest. If you can’t find the documents yourself, contact your lender and they should be able to tell you. Once you’ve gotten ahold of this information, the financing process is as simple as following these steps:

• Check your credit score. If your credit score has improved since you first financed your vehicle, chances are you can get a better deal from refinancing. Your credit score improves by paying your bills on time and in full.
• Start applying. Be sure to apply to multiple companies so you can compare deals and get the best rate possible. Be sure to submit everything within 14 days, otherwise your credit score will be negatively impacted.
• Evaluate offers. Once you’ve gotten some offers from lending companies, compare the numbers to see what your best deal is. You can use our online payment calculator to help you.
• Decide loan term. Depending on your financial situation, you’ll have to decide whether you prefer a longer or shorter-term loan. If you opt for a short-term loan, you’ll be paying more per month, but you’ll end up paying less interest. By contrast, a longer-term loan will have you paying less in total per month but more in interest in the long run.

What to Know When Refinancing a Car Loan

There are some key things you should keep in mind as you consider refinancing your car:

• Fees: Your current loan might have fees associated with paying it off early, which could make it challenging to refinance.
• Underwater Finances: It can be hard to get approved for refinancing if you’re underwater financially, meaning you owe more than your vehicle is currently worth.
• Older Vehicles: Many lenders won’t want to refinance an older car because it has already experienced major depreciation.

Learn About Your Financing Options at Nyle Maxwell CDJR Killeen

If you have any questions about refinancing a car in the Nolanville or Harker Heights area, feel free to contact our office! We’re happy to help you learn more about the refinancing process and decide if it’s the right choice for you.