How to Refinance a Car Loan

Do you want to lower your monthly car payments and save on interest? If that’s the case, knowing how to refinance a car loan is essential. What’s the best way to refinance auto loans around Lakeville?

At Burnsville Toyota, our finance staff has been helping Apple Valley customers learn the ins and outs of refinancing. In this guide, we explain what to know when refinancing your car. Don’t forget to reach out online or call us at (952) 234-8285 with any additional questions.

How Do You Refinance a Car Loan?

Before discussing the best way to refinance auto loans, we need to start with the basics. The main goal of refinancing is to lower the interest rate you are currently being charged. Review your documents to determine what you’re paying and contact your lender. Once you have this information, perform the following steps:

• Check Your Credit Score: When someone asks us “What to know when refinancing your car,” we always recommend first checking your credit score. If you pay all your bills on time, your credit score will improve, and you’ll benefit from refinancing.
• Start Applying: Apply to several automotive refinance companies to ensure you get the best rate. Make sure you submit your applications within 14 days to minimize any negative effects on your credit score.
• Evaluate Offers: Take time to run the numbers so any new offers coming back will provide the monthly payment you’re looking for.
• Decide Loan Term: An important part of how to refinance a car loan is deciding whether to have a shorter or longer term loan that best fits your needs. Shorter-term loans require larger monthly payments but pay less interest. By contrast, a longer-term loan will have smaller monthly payments, but you will pay more interest.

The best way to refinance an auto loan depends on your circumstances, so make sure that any terms or offers you choose will work for your situation.

What to Know When Refinancing Your Car

Now that you know the answer to the question, “How do you refinance a car loan?”, there are a few other things to consider when making this decision:

• Fees: You will want to check your original car loan to make sure there are no fees associated with paying it off early. If there is, refinancing won’t be very cost-effective.
• Underwater Finances: If you owe more than your vehicle’s currently worth, it is harder to get approved for refinancing.
• Older Vehicles: Many lenders won’t refinance an older car that has already undergone major depreciation.

If you find yourself in any of these, call the Burnsville Toyota finance center. Our experts can give you advice on the best options to fit your circumstances.

Learn About Your Financing Options at Burnsville Toyota

So, how do you refinance a car loan? Now that you have the answers, turn to Burnsville Toyota for all your needs. We have an expanding section of car-buying tips put together by our finance experts answering various questions. As one of the most awarded and accomplished dealerships in the Savage area, we’re here to help no matter your needs!