The process of auto financing can be tough, and many people ask “how do you refinance a car loan?” Luckily, there’s a simple step by step process on the best way to refinance an auto loan. Follow along with Envision Toyota of West Covina as we tell Baldwin Park drivers how to refinance a car loan and show them how to apply for financing with us!
How Do You Refinance a Car Loan?
When you’re refinancing your car loan, you’re aiming to lower the interest rate you’re being charged each month. As a result, you have to know what you’re currently paying. Review your documents or chat with your Glendora lender to confirm what your current monthly payments and interest rate are. After you have that handy, follow these steps:
- Check your credit score. Paying your bills on time means your credit score will increase and you could benefit from refinancing.
- Start applying. Apply to multiple auto finance companies to make sure you get the best rate. Submit everything within a 14 day period to minimize the negative impact on your credit score.
- Evaluate your offers. Take some time and run the numbers to ensure that any new offers will get you the monthly payment you want.
- Decide the loan term. You’re going to want to figure out whether a longer or shorter term loan is best for your situation. A shorter term loan will require larger monthly payments but you’ll pay less in interest in total. With a longer-term loan, your monthly payments will be lower, but you’ll pay more interest in the end.
What To Know When Refinancing Your Car
When considering the best way to refinance an auto loan, you’re going to want to keep these things in mind:
- Fees. You should check your original car loan to ensure there aren’t any fees associated with paying it off early. This may make your refinance plan less cost effective.
- Underwater finances. If you owe much more than your vehicle’s current value, it can be harder to get approved.
- Older vehicles. Lots of lenders won’t refinance an older car that’s already experienced major depreciation.
Envision Toyota of West Covina Knows Financing
You don’t have to go it alone when financing your car in Glendora or Covina! You’ve got the Envision Toyota of West Covina finance team in your corner for everything from financing to service to parts. Contact us today to learn more!
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