How to Refinance a Car Loan

How do you refinance a car loan to get lower interest rates in Scottsdale? To renegotiate the terms of your loan, you’ll need to apply for refinancing loans. Whether or not your rates improve will depend on current loan term, the condition of your vehicle, and other variables that impact how to refinance a car loan. Learn more about the best way to refinance an auto loan with this guide from your local finance experts at Volkswagen North Scottsdale:

How Do You Refinance a Car Loan?

Before you sign a refinancing offer, you’ll need to be certain that refinancing is the best choice for you. After gathering your current loan agreement terms, interest rate, and monthly payment details, follow these steps:

• Check Your Credit Score — With a higher credit score, you’ll have an easier time getting approved for refinancing. It’s a good idea to raise your score well before you begin the application process, as it can take some time before your score reflects the improvement.
• Apply to Multiple Refinancing Companies — To secure the best rate, apply to multiple refinancing companies. If you have a solid credit score you’ll definitely receive more than one offer, so it’s good practice to wait until you can take your pick.
• Evaluate Your Offers — For all offers you receive, run the numbers to be sure they give you the monthly payment you’re aiming for. Try our monthly payment calculator to compare offers quickly, and know what in-house financing dealerships can offer you. Just remember to factor in the cost of liability insurance, fuel, and other variable expenses.
• Decide on Your Loan Term — A shorter or longer term loan could be the best fit for your circumstances and budget. Short-term loans require a higher monthly payment, but will result in less interest overall. Longer-term loans have the advantage of a lower monthly payment, but will accrue more interest by the end of the loan term.

What to Know When Refinancing Your Car

Keep these points in mind as you get set up with a refinancing loan:

• Fees — Review your original loan to be sure it isn’t one that charges a fee for paying the full amount off off early. If fees are involved, then refinancing may not be your best option. A financing expert at our Service Department near Cave Creek can help you sort out the details, and ultimately choose the plan that saves you the most money.
• Underwater Finances — Be aware that if you still owe more than your vehicle’s current worth, getting a refinance loan approved will be more difficult.
• Older Vehicles — Getting a refinancing loan may also be difficult with an older vehicle, because it has already experienced major depreciation.

Explore Your Refinancing Options with Volkswagen North Scottsdale

If you have further questions, the finance experts at Volkswagen North Scottsdale are happy to go over refinancing details. Stop by our financing Department near Paradise Valley for lots more on leasing your first Volkswagen, to learn about the certified pre-owned meaning, or leasing a used vehicle.