Are you interested in finding ways to reduce your monthly car payments and save on interest? Elgin Toyota has details about auto refinance and how this can be your best financial path. Learn how to refinance a car loan and more car buying tips in the Chicagoland area from our financial experts.

How Do You Refinance a Car Loan?

The goal of refinancing your car loan is to lower the interest rate you are charged each month. You need to know what you are currently paying, so review your documents or contact your lender to confirm your current interest rate and monthly loan payments. Once you have all of the necessary information handy, follow these steps:

  • Check Your Credit Score: If your bills were all paid on time since your vehicle was purchased, there is a good chance your credit score has improved, and you could benefit from refinancing. 
  • Start Applying: Apply to several automotive refinance companies to ensure you get the best loan rate. Make sure you submit all applications within 14 days to reduce the negative impact on your credit reports and score.
  • Evaluate Offers: Take time to run the numbers to make sure you will get the monthly payment you are looking for. Use our online monthly payment calculator to compare offers.
  • Decide Loan Term: Decide if a longer or shorter-term loan fits best fits your situation. A shorter-term loan will require larger monthly payments, but you will pay less interest in total. With a longer-term loan, you have smaller monthly payments, but higher interest rates. 

What to Know When Refinancing Your Car

There are some things to consider when deciding to refinance a loan:

  • Fees: Check the original loan to ensure there are no fees when paying it off early. If there are, refinancing may not be cost-effective. 
  • Underwater Finances: If you owe more than what the car is worth, getting approved for financing can be difficult.
  • Older Vehicles: Many lenders will not let drivers refinance an older vehicle that has experienced major depreciation.

If you find yourself in any of these situations, contact the finance center at Elgin Toyota. Our experts are here to help with the best ways to refinance an auto loan.

Get Your Financing Tips at Elgin Toyota

Our finance experts are waiting to share what you need to know when refinancing your car. If you have additional questions about the best way to refinance an auto loan, contact us today!