How to Refinance a Car Loan

Cerritos drivers interested in lowering their monthly car payments are in luck! Consider refinancing your car loan to save on interest. If you’re wondering, “how do you refinance a car loan?”, follow along with the guide at Lexus of Cerritos to learn how to refinance a car loan and other tips you should know. If you have financing questions along the way, reach out to the team in our finance center.

Refinancing a Car Loan

For Long Beach drivers looking to refinance their loan, the goal is to lower the interest rate being charged each month. First, drivers should know what they are currently paying and what the current interest rate is. Consider contacting the lender for confirmation of the interest rate and monthly payment amount. Follow these steps for how to refinance a car loan:

• Verify Current Credit Score: Drivers who have a consistent history of timely payments since the vehicle was purchased will likely see an improvement to their credit score. Refinancing may be the right option.
• Start Applying: Search for a couple automotive refinance companies and submit an application to ensure the best rate is found. When applying, make sure they are all sent within a 14-day period to avoid negative impact to the credit score.
• Evaluate Offers: Evaluate the offers and current personal budget to make sure the monthly payment is reasonable. Compare the offers with the help of a payment calculator.
• Decide Loan Term: Consider term length. Drivers opting for a shorter term will pay larger monthly payments, however, they end up paying less interest for the loan. Those opting for a longer term will find that the smaller monthly payments are easier to handle, but end up paying more in interest by the end of the term.

Drivers thinking, “how do you refinance a loan”, should fully consider their circumstances to make sure the offer or refinance terms fit their personal situation.

Refinancing Tips

Drivers interested in refinancing should keep these tips in mind to help decide if refinancing a car loan is the right option:

• Fees: Some car loans have fees attached when attempting to pay it off early. Verify the terms of the loan as it may not be cost-effective to consider refinancing.
• Underwater Finances: Drivers may find that they owe more on the loan than the vehicle is worth, and it can be difficult to secure a refinanced loan.
• Older Vehicles: Similarly, if the vehicle is older and experienced major depreciation, it can be harder to secure a refinanced loan from lenders.

Explore Financing Options with Lexus of Cerritos!

Now that you have a better understanding of how you refinance a car loan, contact us if you have any more questions about car financing or read on to learn more about returning a leased vehicle. Our knowledgeable finance experts are ready to walk you through the process, end to end.