How to Get a Refinance Used Car Loan

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January 9, 2014
A refinance used car loan can potentially free you from the high monthly payments and interest rates that you might currently be paying. If interests have been dropping or you have substantially improved your credit rating in the last six months refinancing your used car loan could be a great way to save money. Here's how it works.

How Does a Refinance Used Car Loan Work?

You can think of a refinancing your used car loan like refinancing a mortgage. Put simply, the amount borrowed with your refinanced used car loan is used to pay off the original loan, typically at a lower interest so you can pay less towards this loan every month. Keep in mind that the amount you can borrow with a refinance used car loan is determined by your current loan's balance due and your car's current market value.

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To begin your quest to get refinancing, your first step should be to contact the institution that funded your current loan. If you have been making your monthly payments regularly and on time, then it should be easier to persuade them to refinance your used car loan. If they refuse, there are many other companies, some specializing in refinancing, that may be able to help you instead.

To find alternatives to refinance you used car loan start on websites like Bankrate.com or LendingTree.com to shop and compare rates. You will be asked to provide your personal information and they will provide a list of interest rates or quotes from multiple lenders. Their databases have multiple lending institutions, thus alleviating the time-consuming task of finding these on your own. Be sure to get multiple quotes so that you get the best rate possible.

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