Can You Refinance a Car Loan?

2023 Kia Carnival

If you’re currently financing a vehicle in Winter Haven and you’re interested in lowering your monthly payments or saving on interest, consider refinancing! At Regal Kia, our finance team is committed to getting you the best deal on your vehicle, and refinancing is a viable option for many drivers. If you’re unsure of how refinancing works or how to get started, we’re here to help–check out the guide below for details on the best way to refinance an auto loan.

 

 

How Do You Refinance a Car Loan?

Let’s start by answering the fundamental question: how do you refinance a car loan in Plant City? When you refinance, you do so with the goal of lowering your monthly interest rate. The first step in the best way to refinance an auto loan is to determine exactly what you’re paying now–review your documents or contact your lender for details on your current monthly payments and interest rate. Once you have that documentation in hand, follow these steps:

  • Check your credit score. An improved credit score is key to refinancing, so you should be all right as long as you’ve been paying all your bills on time and in full since purchasing your vehicle.
  • Start applying. Be sure to cast a wide net and apply to several auto refinance companies so you can get the best rate possible. Applying has a negative effect on your credit score, so make sure you submit everything within 14 days to minimize the impact.
  • Evaluate offers. The benefit of applying to several different companies is you can compare offers to get the best rate. Take your time to evaluate the offers you get, and be sure to use our monthly payment calculator to help you!
  • Decide your loan term. Depending on your current financial situation, a longer or shorter-term loan might be better for you. With a short-term loan, you’ll end up paying more each month but you’ll pay less interest in the long run–with a long-term loan, it’s the opposite.

What to Know When Refinancing Your Car

In addition to the steps above, there are a few key things you should keep in mind before committing to refinancing your auto loan. Here’s what to know when refinancing your car:

  • Fees: Your original loan may have hidden fees associated with paying it off early, so refinancing may not end up being cost-effective.
  • Underwater finances: If you’re underwater on your financing–in other words, if you owe more on your car loan than its current value–you may not be eligible for refinancing.
  • Older vehicles: Older cars that have already undergone significant depreciation are much harder to get refinanced than their newer counterparts.

Learn About Your Financing Options at Regal Kia

If you have any questions about how to refinance a car loan, don’t hesitate to contact our office! You can also stop by our dealership near Brandon to talk to a member of our finance team in person, and we’ll be happy to help you out.

 

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