When it comes to refinancing your auto loan, you have several options to consider. Refinancing can help lower your monthly payments, reduce your interest rate, or even give you cashback if you’ve built equity in your car.
But where should you go to refinance?🤔
|
|
[faq3]
[faq2]
[faq4]
[faq5]
When refinancing, you can receive cashback but, you’ll need to have equity that you’ve built into your car. So, if you refinanced and received a new auto loan that’s worth more than what you have to pay on the balance of the previous auto loan, then you can keep the difference if needed.
Say your car is worth $13,500, and you’ve paid $7,500 (with a remaining balance of $6,000). Lenders allow you to borrow different amounts, such as 90% of your car’s value. This rate would mean you’ll qualify to refinance your auto loan for as much as $12,150 ($13,500 - 90%), which leaves you with $4,650 in equity on your car that you could cash out if needed.
Psst... cashing out can be risky due to having additional debt with your lender, which you’ll have to eventually pay back. |
There isn’t a legal limit on how many times you can refinance, but you have to make a financial decision that works best for you. As mentioned above, lenders review your credit report, and they’ll notice inquiries such as how many loans you have and the attempts you’ve refinanced if you’ve refinanced more than once.
Try to avoid refinancing more than once by doing some research first. Using the examples above, you can contact a lender and see how much a new loan would be, then you can compare offers and select one that works for you.
The common recommendation is to wait 60-90 days after getting your original auto loan. This allows time for your vehicle title to transfer properly, making refinancing smoother. If you've had your loan for more than three months, the best time to refinance depends on your current loan balance.
Curious about when to refinance or when to hold off?
Of course! If you already have the perfect car and are financed with another lender, you can refinance with us where we can beat your current lender’s interest rate up to 1% APR1 reduction for loans up to $24,999 and up to 1.5% APR1 reduction for loans above $25,000!
If you’re ready to refinance, take the time to explore all of your options and calculate how much you could save. Whether you want lower payments or cashback, refinancing might be the right move for you.
If you need help with some auto loan terms or need ideas with some auto loan questions to ask a lender or dealer you can also grab the free Auto Loan 101 Guide.
Our Customer Service Representatives are here for you and ready to assist! You can send an email or give us a call at 704.375.0183.
[faq1]