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What does refinancing a car loan mean?
I have a car loan with an interest rate of 11.99%. This seems high to me, and my credit union agent told me that I should apply for refinancing with them. What does this mean?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
That’s very savvy of you to take notice of your sky-high interest rate! The good news is that refinancing a
car loan
could be the answer to help you save money.Refinancing a car loan is an almost identical process to getting a car loan. The only difference is that you already have a car loan and are just shopping for another lender so you can lower your monthly payments and interest rate.
To refinance your vehicle and get rid of that scary 11.99% interest rate, follow these tips:
- Check your credit score to see if you need to pay down debt
- Learn your current loan balance and value of your vehicle to assess if you’reupside downon your car loan
- Make sure your current lender has noprepayment penalties
- Shop around for the best rate
After shopping around, you should be able to find the best rate at a better price. Make sure to do the same with your car insurance. By using the
Jerry
app, you can compare quotes to find the best rate for your car insurance and save even more money when combined with your new lower-interest car loan.View full answer
- Gregory R.
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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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