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How to Refinance a Car Loan

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Maybe it’s been a couple of years since you took out a loan to buy your car, but your credit is much better now. It might be time to refinance for lower monthly payments, like so many of our Middletown customers have done. But how do you refinance a car loan? Our finance department is here to help. So, let’s talk about the best way to refinance an auto loan and what to know when refinancing your car.

How Do You Refinance a Car Loan?

So, how do you refinance a car loan, exactly? The best way to refinance an auto loan starts with some research and homework on your part.

How to Refinance a Car Loan:

  • Check your credit report. When it comes to what to know when refinancing your car, this is probably the most important. So, pull your report and fix any issues that are impacting your credit.
  • Calculate what your monthly payment should be. Our finance calculator can help you figure out what kind of rates you need to get the payments you want.
  • Get pre-approved. The pre-approval process doesn’t impact your credit score. Actual applications for credit, on the other hand, will. That’s why it makes sense to get pre-approved so you’ll know it will be worth it to apply to a lender.
  • Shop around. Dealing with only one lender is not the best way to refinance an auto loan. Fortunately, most dealerships work with multiple lenders. So, talk to our finance department before you approach every lender in Warwick.

What to Know When Refinancing Your Car

Any guide on how to refinance a car loan has to include some caveats. The best way to refinance an auto loan is to start with knowing the true cost of doing it.

What to Know When Refinancing Your Car:

  • Every loan has fees. Check with your lender.
  • Your original loan may have a prepayment penalty.
  • It may not make sense to refinance if your car is older than eight years old, has more than 100,000 miles on it, or you owe more than what it is worth.
  • You may have to pay to re-register the car or transfer the title, depending on which state you live in.
  • You will likely get a better loan only if your credit score has improved since you originally bought the car.

Talk to the Finance Department at Middletown Honda

Our finance staff would be happy to talk to you about the best way to finance your auto loan. You can even apply for financing online, if you’re looking to buy. Feel free to come in and check out our new vehicle specials. We’re conveniently located near both Monroe and Goshen. So stop by or contact us today!

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