How to Refinance a Car Loan

Are you looking for a way to lower your monthly car payments? Then you’re likely interested in learning how to refinance a car loan. Our finance department has helped lots of Elgin drivers in your situation, which is why we’ve put together the guide on the best way to refinance an auto loan below. We’ll also discuss what to know when refinancing your car below. So, how do you refinance a car loan in Schaumburg? Keep reading to find out!

How Do You Refinance a Car Loan to Get Lower Payments?

So, how do you refinance a car loan in order to get lower monthly payments? The best way to refinance an auto loan starts with a little homework and understanding of your own financial situation. Refinancing a car loan can be a great option for Schaumburg drivers whose credit scores have improved since starting their loans. Here’s how to refinance a car loan step by step:

1. Pull your credit report, and fix any issues that are negatively impacting your credit.
2. Figure out what your monthly payment should be. Our car payment calculator can help with that.
3. Get pre-approved. We can help with that as well.
4. Shop around for the best rate. Applying to only one lender is not the best way to refinance an auto loan. Fortunately, our finance department knows how to refinance a loan by dealing with multiple lenders. What’s more, we’re able to leverage our relationships with those lenders to get our customers the best rates.

Things to Keep in Mind About Auto Loan Refinancing

Refinancing a car loan can have downsides for some South Elgin drivers, such as potentially extending the length of your loan and incurring additional fees. That’s why our finance department wants to inform you of what to know when refinancing your car. Here’s what to know when refinancing your car:

• You will probably only get a better rate if your credit score has improved.
• Your old lender may charge a prepayment penalty.
• Your new lender will likely charge fees on your new loan.
• Some states will require you to re-register or transfer the title of your car (more costs).
• You may not save money or qualify for a new loan if your car is older than eight years, has over 100,000 miles on it, or you now owe more than the car is worth.

Talk to the Finance Department at Biggers Mazda About Your Options

Auto financing can be a challenge to navigate if you’re not an expert. That’s why our finance department is ready to help you make sense of your options. In the meantime, feel free to check out our other financing tips, like our posts on whether it’s better to get an auto loan from a bank or a dealership, and how long you can finance a used car. Remember, we’re just down the road from Palatine in Elgin, and we’re here to help. So, drop by or contact us today.