How to Refinance a Car Loan

If you’ve been making reliable payments on your car loan over the past two years, you stand a good chance of obtaining a lower interest rate on your car loan. You’ll need to refinance your loan, however. But how do you refinance a car loan? What is the best way to refinance an auto loan? If you’re wondering about what to know when refinancing your car near Indianapolis, you’re in the right place. Read our primer on how to refinance a car loan. Then, reach out to the Ford of Lafayette finance department for assistance.

How Do You Refinance a Car Loan?

What is the best way to refinance an auto loan, and what are the first steps of how to refinance a car loan in the first place? Here’s what to know when refinancing your car in greater Frankfort:

• Check your credit score, and compare it to historical data to see if it’s improved. Also, take a moment to look over your band records to determine whether your debt-to-income ratio has improved. If so, refinancing is worth pursuing.
• Then, reach out to a variety of automotive finance lenders (our financiers can connect you to several), and apply. Make sure tosubmit your applicationswithin the same two weeks, so you don’t tarnish your credit score.
• Once you start receiving offers, use the lowest as leverage to bargain for the best offer possible.

• Then, after you’ve accepted an offer, decide whether you prefer a long- or short-term loan. Long-term loans feature lower monthly payments and higher overall interest paid. Short-term loans are harder on your monthly budget, but you lose less money to interest over time.

What to Know When Refinancing Your Car

Before you start applying, let’s undress some important information, so you can be sure you’re following the best way to refinance an auto loan:

• Fees: Many loan terms have a fee for early termination, so you’ll want to weigh the costs of any fee against the savings you’ll get from a lower interest rate.
• Underwater Finances: Is your vehicle worth less than what you currently owe on it? In that case, it will be difficult to refinance it.
• Older Vehicles: Many lenders won’t refinance older vehicles.

Follow the Best Way to Refinance an Auto Loan with Ford of Lafayette

Our financial experts can guide Delphi drivers through the steps of how to refinance a car loan and answer any questions about what to know when refinancing your car. Just call us at (765) 257-2870 for assistance. And while you’re here, take a moment to explore the exclusive lifetime powertrain warranty that comes with all new vehicle purchases. You can just trade in your car and put the value towards another on our lot, after all!