How to Refinance a Car Loan

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Over the years, many Ellensburg drivers have asked us here at the Harvest Honda Yakima finance center, “What’s the best way to refinance my auto loan?” Precisely because every person’s loan — not to mention financial situation and credit background — is different, there isn’t quite a one-size-fits-all answer. Still, there are plenty of tips we can provide that may help you learn how to refinance a car loan in a way that works for your unique needs. Ready? Read on or contact us with any additional questions!

 

 

How Do You Refinance a Car Loan?

Before we answer the question of how you refinance your car loan, we should address why someone would want to go through the process. The number one reason is to lower your monthly payment amount. With that in mind, here’s what to do to refinance a car loan in Sunnyside or Wenatchee:

  • Check Your Credit Score: You can access your credit score from several different sources, most of which are free, at least once a year. This is an essential part of the refinancing process because it allows you to have a gauge of whether or not your credit will allow you to lower your monthly payment compared to what it was when you signed the loan agreement originally.
  • Start Applying: Apply to several automotive refinance companies to be certain that you get the best rate. Try your hardest to do this within a 14 day period to minimize the negative impact it can have on your credit score.
  • Evaluate Offers: Take time to run the numbers. Evaluate options carefully. Be sure that in the long-run, refinancing will be financially savvy. Don’t be shy about reaching out to our finance experts during this process!
  • Decide on a Loan Term: Decide if a longer or shorter term loan best fits your situation. While a shorter term loan will require larger monthly payments, you will pay less interest. You must, however, weigh the pros and cons, given that refinancing is often done to lower payments in the first place.

What to Know When Refinancing Your Car

These other things are important to take note of when attempting to refinance your vehicle in Yakima:

  • Underwater Finances: Do you owe more than your vehicle is worth? If so, it can be very difficult — and potentially inadvisable – to refinance your car.
  • Fees: Some loans come with terms that charge you fees if you pay them off early. If there are fees to contend with, then refinancing may not be a good idea.
  • Older Vehicles: Older cars that have depreciated a lot may not be eligible for refinancing, or if you do consider refinancing, may not be worth the hassle and extra interest paid.

Learn About Your Financing Options at Harvest Honda Yakima

Looking to learn more about how to refinance a car loan with us at Harvest Honda Yakima? Call (509) 902-3316 anytime. Otherwise, check out our other car buying tips like how to take over a car lease, to make the most of your automotive experience! Sometimes trading in a financed vehicle is a better option.

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