How Does Refinancing a Car Work?
Are you considering refinancing your car loan? The potential benefits are really appealing. You can likely lower your monthly payments and may be able to save money overall. On average, people save $145 a month when they refinance with iLending. Plus, you can likely skip a car payment to put cash in your pocket right now.
So how does the process work? It’s actually very simple.
First, Decide If Refinancing Is a Good Idea
Before you start the process of refinancing your car, take some time to consider whether refinancing is the right choice for you. Refinancing might be right for you if you are looking to lower your monthly payment, reduce the overall cost of the car, or reduce the term on your loan. With refinancing, you might be able to achieve one, two, or all three of these goals.
You should also consider whether you’re likely to achieve your goals. You’re more likely to get the terms you want from refinancing your car if you:
- Improved your credit
- Increased your income
- Are current on your payments
- Have less debt than when you bought your car
- Owe less on your car than it’s worth
- Are prepared to shop around
- Don’t have a prepayment penalty on current loan
If your conditions haven’t changed or you’re behind on car payments, you may not get the benefits you hope from refinancing. If you have a prepayment penalty on your current loan, it may eat up any benefit you get from refinancing.
Learn more by reading tips for considering auto loan refinancing and tips for getting your car refinancing approved.
Complete a Preapplication
The first step in getting your car loan refinanced is to complete an online application. This is a preapplication, and it doesn’t take much in the way of documentation or time. It might take just a minute or two.
Check to make sure that the preapplication process won’t affect your credit score – it doesn’t when you apply with iLending.
Talk to a Loan Consultant
The preapplication process will give you an idea of the types of loans you might qualify for. This is great information that can help you see whether it’s likely to be worth it to apply for car loan refinancing.
If you think there are some good options for you there, then it’s time to talk to a loan consultant. Our loan consultants can look at the loan information you provided, as well as the loan offers you saw – and more – to help you find the refinancing option that is truly best for you. They will listen to your situation to understand your goals and what will make the biggest difference to you. They might ask, for example, is it more important to you to reduce your monthly payment or to save money overall?
Your loan consultant is basically helping you to shop around for the best loan terms for you. We partner with lenders around the country, many of whom focus on people just like you – looking to get better terms on their car loans. Your loan consultant will help you understand the benefits of each option so you can make an informed decision about your new loan.
Apply for Your Loan
By helping you choose the right loan for you and making sure your application is complete, your personal loan consultant maximizes the odds that you will be approved. Approval usually doesn’t take long, but in the meantime, make sure you make any payments that come due on your current loan.
Start Paying Your New Loan
Once you’re approved for your new loan, you can switch over to making the new payments, which will likely be a lot less than your previous loan. As we said above, you’ll probably be able to skip a payment between your previous loan and your refinanced loan, which, along with the lower monthly payments, can really help make some room in your budget or give you some extra spending cash.
Apply Today – iLending Makes It Easy
If you’re considering refinancing your car loan, iLending makes it easy. You can start the process in just a few minutes to see what types of terms you might be able to get.
Click here to get the process started today.
What would you do with an extra $132* in your pocket?
