Should I Refinance My Car Loan?
Updated: Feb 19, 2019
Are you unhappy with your current interest rate or monthly payment on your car loan? Have you improved your credit score since you purchased your car? Now may be a good time to consider refinancing your car loan. By refinancing, you can save hundreds or even thousands of dollars in interest over the remaining term.
Is It Difficult to Refinance My Car?
No. It's much easier than refinancing a house and there are typically no closing costs associated with doing so. Lenders have different requirements but your AppCore Finance Manager can help determine which lender will work best for your specific situation. One thing to be mindful of though is the mileage requirement. Some lenders won't finance a vehicle with over 100,000 miles while others will allow higher mileages. The lower the mileage, the more lenders you will have potential access to.
What If I Owe More On My Car Than What It's Worth?
We call this being "upside down" in the car business. Typically it is easier to find a lender to offer you financing when your car is worth more than your current loan. If you do owe more than what your car is worth though, there are still some lenders that will work for you.
I Had Bad Credit A Couple Years Ago When I Bought My Car, But It Has Improved....
Great! Kudos for taking the effort to improve your credit. Chances are likely that you have a higher interest rate on your current loan because of that previous credit history. If you have been diligent about making your car payment and other loan/credit card payments on time since purchasing your car, this would be a good time to look at refinancing.
Will I Be Penalized For Paying Off My Previous Loan?
If you look at your original retail loan agreement right below the Truth-In-Lending Disclosure (where it shows your APR, amount of interest you will pay, etc) there should be a Pre-Penalty statement with a checkbox next to it. More likely than not, you will not have to worry about any prepayment penalties however it is recommended that you double check just to make sure.
Refinancing your car loan can help save money on total interest paid and/or lower your monthly payment. The process is fairly simple and only requires that you complete a new credit application and authorize a new credit check by the lenders. You can begin the process right from our secure website and an AppCore Finance Manager will reach out to within 24 hours to speak further about your options. If you're not ready to complete a credit application but still have a couple questions, please feel free to email us at Info@AppCoreMn.com. We're here to help!