To refinance a car loan, the process generally involves these main steps:
- Find out your current loan payoff amount and any early exit fees by contacting your existing lender.
- Assess your refinancing options by comparing lenders' offers, interest rates, fees, and loan terms to find a better deal.
- Gather and submit required documents, such as details about your current loan, your car, income, and credit information to support your application.
- If approved, the new lender will pay off your current loan, and you start making payments on the new loan, typically with a lower interest rate or better terms.
Key things to consider include having sufficient remaining balance on your current loan (often at least $3,000-$7,500), checking your credit score, and the value and mileage of your car. Refinancing can save money if you get a lower interest rate or better monthly payments, but always compare terms carefully and check for any prepayment penalties on your existing loan.
