How to Refinance a Car: Step-by-Step Guide

Written By Minh Tong
Aug 29, 2022
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Refinancing a car loan is a financial process where a loan borrower pays off an existing auto loan with a new one. There are many reasons why people choose to refinance their cars, including getting a lower interest rate, extending a car loan term, or consolidating multiple loans into one. No matter what your reason for refinancing is, our guide will help you understand how to refinance a car with step-by-step directions.

Step 1: Check your credit score

One of the first things you should do when considering refinancing your car is to check your credit score. Your credit score is a key factor that lenders use to determine the interest rate you qualify for. The higher your credit score, the lower the interest rate you’re likely to get. If your credit score has improved since you took out your original car loan, you can qualify for a better interest rate by refinancing. Conversely, if your credit score has worsened, you may end up with a higher interest rate. Either way, it’s important to check your credit score before shopping for a new car loan so you have an idea of what interest rates you may qualify for. You can get your credit score for free from several sources, including, FICO®, and Experian.

Step 2: Shop around for the best interest rates

When refinancing a car loan, comparing offers from multiple lenders is essential to ensure you get the best deal possible. You will also need to consider any fees associated with refinancing a car, as these can add up and offset any savings you may realize from a lower interest rate.

Step 3: Review your current loan terms

Once you know your credit score, look at your current loan terms. You will need to check the interest rate, monthly payment, remaining balance, and loan term. Knowing this information will help you quickly compare offers from prospective new lenders and determine how much money you could save by refinancing your car.

Step 4: Estimate the value of your car

To refinance your car, you’ll need to have equity in it. Equity is the difference between the value of your vehicle and how much you owe on a loan for the vehicle. Most lenders require at least 20% equity to qualify for a car refinance. So, if your car is worth $10,000 and you owe $8,000 on your loan, you have 20% equity. If you don’t have 20% equity, you may still be able to refinance your car, but you may have to pay for private mortgage insurance (PMI). PMI is an additional insurance policy that protects the lender in case you default on a loan.

Step 5: Compare car refinancing deals from multiple lenders

When considering refinancing your car loan, you’ll need to compare offers from multiple lenders to ensure you’re getting the best deal possible. You will also have to factor in any fees associated with refinancing, as these can add up and offset any savings you may realize from a lower interest rate.

Step 6: Calculate your savings

When comparing offers, you should also be able to calculate the savings from refinancing. To do this, take a look at the new loan term. A shorter loan term will typically have a higher monthly payment with less interest over the life of the loan. A longer loan term will have a lower monthly payment with more interest over time. Choose the loan term that makes the most financial sense for you.

Refinance Your Car Today

Refinancing a car can be a great way to save money on interest and lower your monthly payments. However, it’s essential to do your research on buying a car with debt before making a decision. If you’re thinking about refinancing a car, skip the paperwork and let the refinancing experts at Americor walk you through the process and get a great deal that meets your financial needs.



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We provide debt resolution services. Our clients who make all monthly program payments save approximately 40 – 50% of their enrolled debt (average of 43%) upon successful program completion, before program fees. Fees are based on a percentage of your enrolled debt at the time of starting the program and range from 15%-25% of your enrolled debt. Programs range from 20-48 months. Clients must save at least 25% of each debt due to an enrolled creditor before a bona fide settlement offer will be made. On average, clients receive their first settlement within 4-7 months of enrollment and approximately every 3-6 months thereafter from when the prior debt was settled. Not all Clients complete the program. Estimates are based on prior results and may not match your results. We cannot guarantee that your debts will be resolved for a specific amount or percentage or within a specific timeframe. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting, legal advice or credit repair services. Our program is not available in all states; fees may vary by state. Some programs may be offered through The Law Firm of Higbee & Associates d/b/a Advantage Law. The use of debt resolution services will likely adversely affect your credit. You may be subject to collections or lawsuits by creditors or collectors. Your outstanding debt may increase from the accrual of fees and interest. Any amount of debt forgiven by your creditors may be subject to income tax. Clients may withdraw from the program at any time without penalty and receive all funds from their dedicated account, other than funds earned by the company or fees paid to third-party service providers, as may be applicable. Read and understand all program materials prior to enrolling. Certain types of debts are not eligible for enrollment. Some creditors are not eligible for enrollment because they do not negotiate with debt relief companies. To determine the offers you may be eligible for, Americor conducts a “soft credit pull.” This credit pull does not impact your credit score, creditworthiness, or ability to obtain credit from other sources. The soft pull is not a tradeline entry, it does not report against your score and will only take a few minutes.

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