How to Refinance a Car Loan

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Are you interested in lowering your monthly car payments and saving on interest? A great way to do that is by refinancing your car loan. At Rallye BMW we are here to answer any questions you may have about refinancing so you can make an informed decision. We have the details on how to refinance a car loan in Syosset!

How Do You Refinance a Car Loan?

What is the purpose of refinancing? Refinancing helps to lower the interest rate you have to pay each month. It is important to know your current interest payments. Review your documents or contact your lender to confirm your current interest rate and monthly payments. Once you know how much you pay in interest per month, you can begin with the following steps:

  • Know Your Credit Score: If you have consistently paid your bills in a timely manner since your vehicle was purchased, it is likely that your credit score has improved and you could benefit from refinancing.
  • Begin the Application Process: Apply to several automotive refinance companies so you know whether you are getting a competitive rate. You will want to submit all applications within a 14 day period to minimize the negative impact on your credit score.
  • Evaluate Offers: Carefully consider each option so you can get the best deal possible. Use our online monthly payment calculator to help you compare offers.
  • Decide Loan Term: Keep your financial situation in mind when deciding on a short term or long term loan. With a short term loan, your monthly payments will be higher, but you will pay less interest in total. Choose a long term loan for smaller monthly payments, but remember that you will end up paying more in interest in the end.

The best way to refinance an auto loan depends on your circumstances, so make sure that any offer or term you choose works for your situation.

What to Know When Refinancing Your Car

Before you refinance, there are a few more things to consider.

  • Underwater Finances: It can be more of a challenge to get approved for refinancing if you owe a lot more on your vehicle than it is currently worth.
  • Older Vehicles: If your vehicle is older and has steeply depreciated, most lenders will not refinance the loan.
  • Fees: Make sure there aren’t any fees associated with paying off early your original car loan in advance. If there are, it may not be cost-effective to refinance.

If you find yourself in any of these situations, contact the finance center at Rallye BMW. We would be glad to help you find an option that is better for your unique circumstances.

Learn About Your Financing Options at Rallye BMW

Our finance experts are waiting to share what you need to know when refinancing your car. If you have any other questions about refinancing or what other options may be available to you, do not hesitate to contact us at your convenience. We would be glad to assist you.

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