How does an auto loan refinance work?
Refinancing an auto loan involves replacing your existing car loan with a new one, which could have a different payment structure, interest rate, or term duration.
EXAMINE YOUR CREDIT SCORE
- If your score is lower than anticipated, it could be due to errors in your credit report. Ensure all information is accurate and resolve any discrepancies before proceeding with auto refinancing. You can check your credit score for free on LendingTree.
SUBMIT YOUR APPLICATION ONLINE
- Complete a single form on LendingTree to receive up to five auto refinance proposals from lenders, based on your credit. Be ready with your current auto loan details, such as your monthly payment, APR, loan term, and payoff.
EVALUATE THE PROPOSALS
- When lenders vie for your business, it's to your advantage. Assess the various rates, payments, and terms you're eligible for and select the one that fits your budget. Remember to use a car loan refinance calculator to assist you in crunching the numbers.
SAVE YOUR MONEY
- Congratulations! Reap the benefits of your reduced payment, lower APR, or the capability to repay the loan more quickly. It's satisfying to achieve your financial objectives.
Can refinancing your vehicle damage your credit score?
When you apply for any kind of car loan, including refinancing, a credit check is required. This hard credit check can temporarily lower your credit score, but the decrease is usually minor and short-term.
Is it possible to refinance my vehicle even with poor credit?
Even with poor credit, you can still potentially get approved for a car refinance loan. However, it's important to ensure that refinancing with a company that specializes in bad-credit refinancing is beneficial for you. As with any loan, it's advisable to apply to multiple lenders to understand your eligibility and to choose the best offer. It might even be possible to refinance your car after declaring bankruptcy.
Consider refinancing your auto loan in the following situations:
- Your credit rating has seen a positive change
- There's been a decrease in interest rates
- You're aiming to settle your loan more quickly
- You're looking to lower your monthly installments
- It's been a couple of years since you bought your vehicle
- You didn't explore different loan options when you initially bought your car
