How to Refinance a Car Loan

Refinance Car Loan

Refinancing your car loan might be a good option if you want to lower your monthly car payments and save money on interest. But do you know how to refinance a car loan? If you’re like many North Hollywood drivers wondering, “How do you refinance a car loan?” keep reading. Here the finance team at North Hollywood Toyota explains what to know when refinancing a car, so you can save money on your monthly payments.

The Best Way to Refinance an Auto Loan

Lowering your interest rate is the reason many Los Angeles drivers opt to refinance their loans. So first, you should know what your current interest rate is! Review your loan documents or contact your lender to get all your current loan information. Once you know your interest rate, follow these steps:

  • Check Your Credit Score: If you’ve been paying all your monthly bills on time, there is a good chance your credit score is good enough to qualify for a lower interest rate.
  • Start Applying: Apply for financing with several lenders to ensure you get the best possible rate. Be careful to submit all applications within a 14-day timeframe so it doesn’t negatively impact your credit score.
  • Evaluate the Offers: Look at each loan approval carefully before deciding. Compare the monthly payment, interest rate, terms, and any fees. You can use the North Hollywood Toyota monthly payment calculator to understand what you can afford and compare offers. 
  • Decide Loan Term: Decide if a longer or shorter-term loan best fits your budget. A shorter-term loan means higher payments but less interest. With a longer-term loan, your monthly payments will be less, but you will pay more interest over the lifetime of the loan. 

The best way to refinance an auto loan depends on your unique situation, so always double-check the numbers to be sure the new loan you’re interested in will make sense for your Glendale lifestyle.

What to Know When Refinancing Your Car

There are a few other factors to consider when you are deciding to refinance your vehicle:

  • Fees: Check your original car loan agreement to ensure there are no pre-payment fees. If there are, refinancing may not be wise.
  • Underwater Finances: If you owe more on your loan than your vehicle’s currently worth, you are in a negative equity position (or underwater), and it will be harder to qualify for refinancing. 
  • Older Vehicles: Some lenders won’t refinance older cars that have already undergone significant depreciation. 

If you are in any of the above situations, contact the finance specialists at North Hollywood Toyota for advice or options that better suit your situation.

Learn Your Financing & Leasing Options at North Hollywood Toyota

Our finance experts are happy to answer your questions. You can apply for a loan online or at our dealership near Burbank. Contact us to let us know how we can be of service today!

North Hollywood Toyota 34.153924, -118.367564.