How to Refinance a Car Loan

Hands Doing Calculations with Calculator

How do you refinance a car loan? To get you on the Sussex roads confidently, our finance department can walk you through the process and show you some of the best ways to refinance an auto loan. We’ll break down the refinancing process to make it simple and easy to follow along. 

Best Ways to Refinance an Auto Loan

One thing to know when refinancing your car is how much you’re currently paying. Ideally, you’re refinancing a loan to get a lower interest rate than what you’re currently paying each month. Knowing how much you already pay will give you an idea of which refinancing option will give you the best deal. Review all relevant documents, like payment statements, or contact your lender to get the number of what you’re currently paying. Once you have the necessary information, you’ll want to do the following: 

  • Check Out Your Credit Score: Knowing what your credit score is will help you determine your options, since a higher credit score will give you a better chance of getting refinanced. If you pay all of your loan payments on time, then your credit score has likely increased.
  • Apply: Apply to several automotive refinance companies to ensure you get the best rate. Make sure you submit all applications within a 14 day period to minimize the negative impact on your credit score. 
  • Compare Offers: Compare the numbers on any new and old offers you go over to make sure you get the best deal on monthly payments. Our payment calculator at Mercedes-Benz of Newton can easily help you determine how much you’ll pay each month. 
  • Determine the Loan Term: If you go with a shorter loan term, you’ll have larger monthly payments but less overall interest. With a longer loan term, you’ll have shorter monthly payments, so the interest will be higher. 

These are some of the best ways to refinance an auto loan, but you can use more than one method. The best refinancing strategy will depend on how much you want to pay and what works best for you and your Hackettstown lifestyle. 

Other Things to Know When Refinancing

Here’s what to know when refinancing your car that you can include with the above-mentioned strategies: 

  • Any Fees: You will want to check beforehand if there are any fees associated with paying off your original car loan early. If there are fees, then refinancing may not be the best financial option for you. 
  • Financial Status: If the amount you still owe on your current vehicle is significantly higher than your actual vehicle’s worth, then it may be harder to get refinancing. 
  • Vehicle Age: Depending on your car’s age, some lenders won’t refinance an older vehicle due to the amount of depreciation that has already occurred. 

To get back on the Hamburg roads confidently, we want you to know exactly what your payments will be. If you’re wanting to trade in your vehicle, then we can help you value your trade to get the best deal.

Explore Your Financing Options at Mercedes-Benz of Newton

If you’re in Newton, you shouldn’t have to ask, “How do you refinance a car loan?” Now that you know how to refinance a car loan effectively, you can start thinking about which option is best for you. One of the best ways to refinance an auto loan is by talking with an expert face-to-face to go through the process together. Contact us to help you learn more about how to refinance a car loan and other car buying tips!

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