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How do I refinance my car loan?
I purchased a car with an 84-month loan three years ago. Since then, interest rates have dropped and my credit score has improved quite a bit. A friend told me I should refinance my loan to save cash, but I’m not sure where to start. What’s the best way to refinance my car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Refinancing your car loan
is a great way to save money, so finding out how to do it is a savvy financial play on your part! To refinance your car loan, you follow many of the same steps as getting your original car loan, so the process should feel familiar.Before you begin, review your original loan contract to verify it doesn’t have any
prepayment penalties
. If a loan contract has a prepayment penalty, it may offset the savings of refinancing. Check this first to ensure that refinancing is worth the hassle in terms of time and money.If your contract has no prepayment penalty, the next step is to review your credit report. While the lender will pull your credit report, knowing what’s on it and if you need to pay any delinquencies or other debt down can only improve your chances of getting accepted for a refinance.
Next, shop around for the best rates at:
- Banks
- Credit unions
- Dealerships
- Third-party lenders, such as online lenders
The more effort you put into this step, the greater your chances of finding the best rate possible.
Finally, you can apply for a loan with your lender of choice. Once you’re approved, review the contract and evaluate the loan terms to see if it’s to your liking. Sign on the dotted line, and you’ve refinanced!
Since you’re reviewing your car loan, now is the ideal time to do the same with your car insurance. The
Jerry
app makes it quick and easy to find the best deal on coverage. As a licensed insurance broker, Jerry allows you to compare quotes from over 50 top-rated insurance providers. If you find a better rate, Jerry helps you purchase new coverage, switches your policy, and even cancels your old insurance!View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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