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What does refinancing a car mean?
"I purchased a car about a year ago. Because of my poor credit, my interest rate was 9.75%.
I was told to refinance my vehicle, but I'm not sure what this entails.
What does refinancing a car mean?"
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“To refinance a car, you take out a new loan with a lower interest rate to pay off your older loan that has a higher interest rate. Benefits of refinancing can include a lower interest rate, a lower monthly payment, or even a different loan length.
The process of refinancing a car is the same as getting a car loan. You have to qualify for the loan just as you did the first time. The lender will pull a hard inquiry on your credit report, so be prepared for a slight hit to your score.
As you would with other types of loans, shop around to find the best interest rate possible.”
View full answer
- Gregory R.
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