How to Refinance a Car Loan

Document and Car Key

Did you know you may have an opportunity to lower your monthly vehicle payments as well as save money over time in interest? How is this possible? You may be a good candidate for refinancing your car loan. At Suntrup Hyundai South, we would be glad to discuss the basics of refinancing, so you can see if it is something that is in your best interest. Learn how to refinance a car loan today.

How Do You Refinance a Car Loan?

Many drivers in the Mehlville area would love to lower the interest rate they are being charged every month. Before you can do this, you have to be aware of what your current interest payments are. Take a look at any documentation you have, or talk to your lender directly. Armed with this information, you can follow the steps below:

  • Check Your Credit Score: Take a look to see if your credit score has improved since the time you took out the car loan. If you have been paying all your bills on time since your vehicle was purchased, it is highly likely that your credit score has experienced a boost.
  • Start Applying: Apply at multiple locations so that you can compare rates. Make sure you submit all applications within a 14 day period to minimize the negative impact on your credit score.
  • Evaluate Offers: Carefully review all of your offers before making a final decision.
  • Choose a Loan Term: Is a longer term loan or a shorter term loan a better option for you? If you choose a shorter term loan, your monthly payments will be higher. The benefit is that you will end up paying less in interest over time. If you prefer a longer term loan, you will benefit from lower monthly payments, however, you end up paying more in interest.

What to Know When Refinancing Your Car

Before you decide that refinancing is right for you, there are a few more factors to keep in mind:

  • Fees: Some car loans charge a fee if you pay the loan off early. If the terms of your loan includes this fee, it may not be worthwhile to refinance the loan.
  • Underwater Finances: Do you owe more on the vehicle than its current value? You may find that it is not as easy to get approved for refinancing.
  • Older Vehicles: If you drive an older vehicle that has depreciated significantly since it was purchased, lenders may not approve your application to refinance.

If any of the situations above apply to you, it doesn’t mean you are out of options. Contact the finance experts at Suntrup Hyundai South near Fenton, and we can discuss the best course of action.

Suntrup Hyundai South Makes Financing Hassle-Free

Our finance experts would be happy to share more about what you need to know when refinancing your car. We want to make your vehicle as affordable as possible.

Suntrup Hyundai South 38.5214875, -90.3452578.