When Do You Refinance A Car Loan

What does it mean to refinance a car?

Refinancing your car means replacing your current auto loan with a new one. The new loan pays off your original loan, and you begin making monthly payments on the new loan. The application process for refinancing doesn't take much time, and many lenders can/may make determinations quickly.

How soon after buying a car can you refinance?

Refinancing is possible immediately after buying—even before you make your first monthly payment. Just be sure that you actually end up with a better deal, and that refinancing doesn’t cause you to pay more for your vehicle.

Can you refinance a car loan to get a shorter term?

Refinancing a Car Loan. If you have a longer term loan (5-8 years) then the more interest you will end up paying to your lender, even if you think your monthly payment is low. Refinancing your car loan to get a shorter term will reduce the amount of interest that you pay your lender and in the long run save you money.

What should I look out for when refinancing my car loan?

It’s important to look out for any fees associated with refinancing. For example, there may be prepayment penalties for paying off your current auto loan earlier than planned with your refinance loan. You may have to pay some additional interest in addition to the principal.

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