How to Refinance a Car Loan

Have you been thinking about refinancing your auto loan in Corona? Refinancing is a great option that, when done right, can lead to lower monthly payments and long-term interest savings. Before you dive right into refinancing, it’s smart to review what to know when refinancing your car. Learn how to refinance a car loan and determine if this is a good financial choice for you with the help of the BMW of Murrieta finance center!

How Do You Refinance a Car Loan the Smart Way?

The best way to refinance your auto loan may be different from the best way for other drivers in Riverside, but the end goal is the same: getting a better interest rate and lowering your monthly payment. For starters, you should know exactly what you’re currently paying each month and what your current interest rate is. With this information, you can move onto the next steps:

  • Review Your Credit Score: Your timely loan payments have likely increased your credit score a bit over time, which should increase your chances of refinancing for a lower rate.
  • Apply for Refinancing: Research several automotive refinance institutions and apply to the ones that seem favorable. Remember, it’s best to limit applications to a 14-day period to prevent your credit score from taking a hit.
  • Compare Offers: You don’t have to go with the first offer you receive. Get a few offers on the table, then compare them so you can be sure to choose the option with the best rate and lowest monthly payment. We recommend using our monthly payment calculator to help run the numbers!
  • Choose a Loan Term: Would you prefer a short-term or long-term loan? Keep this in mind as you decide: short-term loans have larger monthly payments and less total interest, but long-term loans have smaller monthly payments and more interest paid.

What to Know When Refinancing Your Car

Now you know the best way to refinance an auto loan, but before moving forward, you should be absolutely sure that refinancing is the right choice. Here’s what to know when refinancing your car:

  • Prepayment Fees: Some auto loans contain a clause that requires you to pay a fee if you pay off the loan earlier than intended. Review your contract to check for this; if you do have a prepayment penalty and it’s more money than you’d save by refinancing, you may want to reconsider.
  • Upside Down Finances: If you have negative equity in your vehicle–you owe more than it’s worth–refinancing may prove difficult.
  • Vehicle Age: Has your vehicle already experienced the bulk of its depreciation? If so, lenders might not consider it for refinancing.

How Do You Refinance a Car Loan in Murrieta?

BMW of Murrieta can help you determine the best way to refinance your auto loan. Contact us to set up an appointment with our finance center in Murrieta, not far from Ontario! Interested in trading in for a new vehicle rather than refinancing your current one? Value your trade for instant insight into its current value!

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