How Do I Refinance My Car Loan?

A lot of people might know about refinancing their mortgage, but did you know you can also refinance your auto loan? This can be done if you are hoping to gain lower monthly payments, get a better rate on your loan, or remove a co-signer.

To explain how to refinance an auto loan, our Elite Acura team walks you through the process below. If you are in the Maple Shade, Moorestown, or Cherry Hill area, you can come by and chat with our finance experts to explore your options.

Should I Refinance My Auto Loan?

Before you go through the steps below, you first want to consider if refinancing your car loan is the right move for you. Begin by checking your credit score to make sure you’ll qualify for the best rates.

You also want to determine if the balance remaining on your loan is higher or lower than the actual value of your vehicle. This is something you can figure out using a refinancing calculator. If it is, it might not be worth refinancing since it may be hard to find a better rate.

Lastly, check to see if there are any prepayment penalties on your current loan. These are fees you’ll be charged if you are to pay off the loan early.

How Does It Work to Refinance A Car?

After considering the above, you may find out that it is worth refinancing your car loan. Wonder exactly how to refinance an auto loan? It might be an easier process than you think!

1. Gather the necessary documents. This includes personal information, like your social security number, driver’s license, and proof of income, as well as paperwork on your vehicle and current auto loan.
2. Shop around for the best deal. You then can start your search to find the best possible deal for your new loan. Get quotes from multiple lenders and see who will offer the best possible rate.  
3. Apply for new loan. Once you have found the rate you want, apply for a loan from that lender. Once approved, they will pay off your old loan and you’ll now make payments to them with your new monthly rate.  

Does Refinancing a Car Hurt Your Credit?

When you apply for a loan, lenders typically check your credit. When this is done, it is called a hard inquiry on your credit. This may result in a small dip in your credit score, but it is only a few points and is just a temporary change.

After about six months, the effect of the hard inquiry typically disappears. Also, even if you apply for multiple loans, car loan inquiries into your credit only count as one hard inquiry, as long as they are made within a 14-day period.

Here to Help You Refinance Your Auto Loan

Now that you know how to refinance an auto loan, it is time to begin the process! Drivers in Maple Shade, Moorestown, and Cherry Hill can also use the expertise of our finance team to help you through the process of refinancing your car loan.

They will be able to help you determine if refinancing is the right move for you and find the best possible rate for your new loan.

Stop by today and chat with one of our finance experts here at Elite Acura to get started on refinancing your car loan. With their help, you might be able to enjoy even lower monthly car payments by refinancing!